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The formation of a FEU combines all the separate leases with different ownership under one operating agreement.
Comet Ridge told the Australian Stock Exchange this morning that the FEU would allow the “orderly development” of the acreage without the constraint of individual lease boundaries.
Under the FEU, Comet is obligated to drill two wells – the first by March next year, and the second within 180 days of the completion of the initial well.
Comet Ridge said the benefits of the FEU included:
• The ability to develop the target fractured shale reservoirs on a geological basis rather than be constrained by individual lease boundaries
• The field can be re-developed in an orderly fashion – i.e. the unit removes the spectre of “competitive drainage” between leases and conserves the natural resource by eliminating unnecessary wells
• All of the acreage within the unit stays intact – irrespective of individual lease expiry dates – when production is established or the ongoing drilling commitment of one well every 180 days is met
• The term of a number of Comet Ridge’s leases will be effectively extended by formation of the unit.
Comet Ridge is currently in the process of getting permits for several wells in the Coal View Unit, as well as on other acreage the under lease over the adjacent Bear River prospect to the west.
