VicPet has diluted a number of its holdings in recent times significantly reducing its exposure to funding commitments while maintaining sizeable interests in a number of prospects.

Now Strike Oil has joined in the joint venture operating the Champion-1 exploration well in the Champion Prospect, a seismically defined anticlinal structure interpreted to have the potential to contain up to 27 million barrels of recoverable oil, if oil is present.

The Champion Prospect is situated 12 kilometres south of the up to 21 billion cubic feet Rivoli Gas Field, with its 11 metre gas column within the Birdrong Sandstone, the reservoir target for the Champion-1 well. The target Birdrong Sandstone in Champion-1 is expected to be drilled at a depth of 1,950 metres. The Birdrong Sandstone is a prolific oil producer in the Carnarvon Basin.

Under the terms of the farmin agreement between Strike Oil and VicPet, VicPet will have a 10% free carried interest through the drilling of Champion-1 to a total well cost capped at $3 million and in the event of the parties agreeing to test a hydrocarbon discovery, the testing of Champion-1 to a total additional cost capped at $2 million.

Strike Oil will also take over the role of operator for the drilling of Champion-1 and ongoing exploration in the permit.

“Victoria Petroleum also welcomes the experience that Strike Oil as a successful offshore operator, most recently with the offshore Otway Basin, Casino gas discovery, will bring to the permit,” said John Kopcheff, managing director of Victoria Petroleum.

“The presence of the Rivoli Gas Field discovery in the Permit provides favourable evidence for the potential presence of gas and oil within other prospects within the permit such as the Champion Prospect.”

Victoria Petroleum has also completed two farm out agreements with Oilex this year leaving the newly floated company with a 65.3%interest in the Rookwood Block of ATP608P and a 76% interest in the remainder of ATP608P, and 76% of ATP593P.

In January VicPet and Oilex signed an agreement which saw Oilex increase its interest in the North Giligulgul Prospect in ATP 574P from 18.75% to earn up to an additional 38.75% by funding 64.58% of VicPet's share of drilling the North Giligulgul-1 well.

Following this agreement with Strike Oil NL, interests in the Champion Prospect and EP 325 including the Rivoli Gas Field are Strike Oil N.L. 40%, Victoria Petroleum N.L. 35%, Black Rock Oil & Gas PLC 15% and Sun Resources N.L. 10%.