Under the farm-in deal, Perth-based Transerv, via its new subsidiary Tejon Energy, has agreed to take a 12.75% interest in the prospect, where Salinas is acting as operator.
To acquire the Wind Gap interest, Transerv will issue 40 million options exercisable at 1c each before mid-2010 and reimburse about $A50,000. Half these options will be conditional on commercial production being achieved from Wind Gap by the middle of next year.
Transerv said the unusual move would give it a dual operating focus, involving exposure to the United States energy market and its Western Australian-focused vehicle maintenance business.
Perth-based Salinas has interpreted Wind Gap to be an extension of the North Tejon gas and oil field, from which about 229 billion cubic feet (Bcf) of gas and 23 million barrels (MMbbl) of oil and condensate have been produced.
Wind Gap has the potential to contain recoverable reserves of 60Bcf of gas and 6MMbbl of petroleum liquids, the company said.
The Kenai Rig #3 would drill the Wind Gap 42-36 well to a planned total depth of 12,500 feet (3810m). The well would have multiple targets in Oligocene to Eocene-aged sandstone reservoirs, all of which were producing in the North Tejon field. The dry hole cost of Wind Gap 42-36 was about $US3 million ($A4 million), with Salinas funding half of the cost.
Production history for Wind Gap, a large anticlinal structure, compartmentalised by faults, showed that wells needed to be drilled in each structural compartment to effectively produce the reserves.
Wind Gap was located within Salinas’ area of focus in the southern San Joaquin Basin, where the company was targeting conventional, sandstone reservoirs with strong flow rate potential. In the event of proven commercial reserves, there was available production infrastructure nearby.
Following the new farm-in, the Wind Gap partners will be operator Salinas Energy (42.5%), Statesman Resources (21.25%), Laris Oil & Gas (15%), Transerv Australia via Tejon Energy (12.75%) and Solimar Energy (8.5%).