Oilex farms-out Timor Sea block

Oilex Ltd has entered into an agreement to farm down 15% of its 25% interest in the highly prospective offshore block 06-103 production sharing contract (PSC) in the Joint Petroleum Development Area (JPDA) of the Timor Sea to Japan Energy Corporation.

Oilex told ASX today that the farm-out agreement enables it to achieve one of its key objectives by reducing financial exposure, while at the same time clearing the way for a landmark two-well drilling program to potentially commence later this year subject to rig availability, targeting a combined oil prospective resource of 285 million barrels (100% basis).

After the farm-out, composition of participating interest in the block 06-103 PSC will be Oilex 10%, Global Energy Inc 25%, GSPC Ltd 25%, Bharat PetroResources Ltd 25%, and Japan Energy Corporation 15%.

Interpretation of the Maura 2,140 km2 3D seismic over Block 06-103 was completed in the first half 2009, identifying a portfolio of over 20 prospects and leads. Drilling locations have been selected for the first two commitment wells within the Block on prospects with mean prospective resources of 195 million barrels of oil in Lore and 90 million barrels of oil in Lolotoe.

The farm-down/farm-out agreement is conditional on the Designated Authority approving an extension to Contract Year 3 of the PSC (ending in January 2010), approval for the transfer of 15% interest to Japan Energy, and JV parties giving their consent to the transfer of interest and not exercising their rights of pre-emption under the JOA. 

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