Tuesday, April 24, Tap Oil (ASX: TAP) is expanding beyond its traditional focus on offshore exploration with a deal focusing on shale oil and gas plays in the onshore Carnarvon Basin.
The deal with private company Rusa Resources covers 2 special prospecting authority applications covering a large part of the Palaeozoic Merlinleigh Sub-basin, the entire Byro Sub-basin, plus associated shelfal areas.
This area is located close to the Dampier to Bunbury natural gas pipeline, allowing any potential discovery to be commercialised either through the growing Western Australian domestic gas market or the liquefied natural gas export market.
Other players in the area include New Standard Energy (ASX: NSE), Australian Oil & Gas, as well as Empire Oil & Gas (ASX: EGO).
Under the agreement, Tap and Rusa will carry out exploration work such as geochemical surveys over the 38,000 square kilometre SPA areas to delineate the preferred acreage for conversion to exploration permits in 2013.
Up to half of the SPA areas can be converted into exploration permits, which Tap will have the right to earn a 20% interest in. Tap will also have an option to earn an additional 15% in each permit.
Besides the Permian shale gas and Devonian shale oil targets, the area also holds conventional oil and gas potential.
Tap has being on the lookout for new opportunities for some time now and the new agreement will allow it to leverage its experience in the Western Australian gas market as well as the northern Western Australia oil and gas upstream business.
The company has about A$100 million in cash, leaving it well positioned to execute its current Thailand, Ghana and Australian programs.
2012 by Bevis Yeo
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