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In 2002 QGC farmed out a seven percent share in its Aberdeen Project in ATP 621P to Thiess, which took over the management and construction of the project and subsequent pilot program developments.
For pipeline and horizontal drilling expert Lucas, this is the second initiative in developing its coal bed methane (CBM) portfolio and follows its purchase of 75% of a petroleum exploration licence in the NSW Gloucester Basin in November 2002.
The move is also consistent with QGC's plans to develop its CBM acreage in the Surat Basin so that it can aggressively pursue gas supply contracts over the next five to 10 years.
"With the development at Berwyndale South (ATP632P) close to certification and production testing underway at Argyle (ATP620P), QGC is actively exploring its extensive resource to identify the next generation of prospective developments beyond the 'Undulla Nose', which encompasses these two tenements" said QGC managing director Richard Cottee.
"Effectively, we are creating an inventory for QGC, with projects in the pipeline at each stage of development, to ensure the company has gas reserves ready in time to meet market demand.
"Importantly, this farm-in agreement with Lucas allows us to continue our exploration program without diverting resources from the paramount focus of commercializing Berwyndale South," Cottee said.
QGC has already drilled two exploration wells in ATP651P, with Wolleebee Creek #1 flowing gas at up to 250,000 cubic feet per day during initial testing in 2002. The 975 sq.km tenement lies to the north west of Chinchilla in the Surat Basin and is close to the Peat/Scotia lateral pipeline.
Under the terms of the agreement, Lucas will act as operator in the tenement for the next two years. In the first stage of work, Lucas will fund the drilling of an exploratory core well (Mamdal #1) to earn a 15% interest in the tenement.
This will provide gas content and permeability data which will be used to determine the 2004 program in the area. Upon completion of stage one activities, Lucas has an option to extend its interest to 50% by funding a second stage of work, to a value of $450,000 before May 2004.
