Under a previous agreement with Beach, Strike said it would earn a 15% interest in the permit, which was the most highly bid-for permit in the first round Queensland Cooper Basin bidding, following the expiry of the permits previously held by Santos 10 years ago.
Strike said ATP633P contains numerous large prospects, including the Gidgee Oil Discovery near the Munro Oil Field Production Licence, which is still held by a Santos consortium. Gidgee-1 flow tested 1028 barrels of oil per day but was abandoned by Santos during a period of low oil prices, when the well encountered production problems and follow-up drilling was disappointing.
Strike said the joint venture expects to acquire a 3D seismic survey in the second quarter of this year to more accurately define the Gidgee Oil Field, before drilling a low risk follow-up well at the end of this year.
The main prospects in the permit are immediately south and up-dip of an oilfield complex, which is connected to the Jackson-to-Moonie oil pipeline. The Tickalara Oilfield within this complex reportedly contains more than 11 million bbls of recoverable oil, according to Strike.
The company said ATP633P was its first area in the Cooper/Eromanga Basin to be awarded following resolution of Native Title issues.
Strike expects permits PELA71 and PELA96 will be awarded about mid-year, with seismic acquisition planned for the end of the year, to be followed by drilling in 2007.
Reprocessing of earlier seismic data has already started in these two areas, which are the subject of a farm-in deal with low-profile startup Advent Energy.
Advent, which hopes to list on the ASX this year, will earn a 25% interest in both areas by funding the first $A2.2 million dollar of expenditure, with Strike Oil retaining a 50% interest in PELA71 and a 41.67% interest in PELA96.
In PELA71, Strike will focus on the area around the Mulapula-1 well, drilled in 1986 by Delhi and Santos. The well managed to recovered oil on test from the Namur Formation before the testing equipment failed. The test was not repeated because the accumulation was considered too small at a time of much lower oil prices, the company said.
Strike’s evaluation of the prospect has indicated a potential 5m oil column in the Mulapula well, with significant up-dip potential, which will be further evaluated by modern seismic acquisition technology prior to drilling. Seismic will also detail additional, potentially larger structures along the trend, it said.
Meanwhile, PELA96 is a large area south of the central Cooper Basin Permian Trough, which in the past has only been lightly explored using old technologies. The area is up-dip from oil discoveries and oil shows in wells to the north, and positioned to trap oil moving out of the Cooper Basin.
The Weena Trough, in the centre of the permit, contains Permian sediments similar those in the Cooper Basin. The area also has an enormous resource of relatively shallow Permian Coals with coal seam methane potential. Strike said this gas could be easily delivered to Adelaide and its surrounds through the Moomba-to-Adelaide gas pipeline, which runs through the centre of the permit.
Strike also has up to a 15% interest in ATP549P, which has good potential for gas discoveries in the northern areas and oil discoveries in the southern areas. It is currently being renewed following expiry of the original term.
Strike said it now expects the Cooper/Eromanga basin area to become one of its additional active core areas with significant early cash flow potential to supplement its current Texas Gulf of Mexico, US Rocky Mountains and Carnarvon Basin areas.