Miro Advisors has been selected by oil and gas explorer New Standard Energy to manage the farm-out of its Western Australian exploration acreage, continuing four years of rapid growth for the Perth advisory firm, as detailed in this week's edition of Business News.
Miro Advisors has been selected by oil and gas explorer New Standard Energy to manage the farm-out of its Western Australian exploration acreage, continuing four years of rapid growth for the Perth advisory firm, as detailed in this week's edition of Business News.
New Standard said it was farming out its exploration acreage in WA to eliminate any large capital commitment so it could focus on growing the value of its acreage in the Eagle Ford shale in Texas.
As part of the farm-out, New Standard will take full ownership of its Southern Canning project after reaching a deal with joint venture partners ConocoPhillips and PetroChina.
It is understood New Standard will receive all of the joint venture acreage for nil consideration.
New Standard said the ownership changes would enable it to package the project into a formal farm-out process alongside its other two fully owned projects – the Laurel project in the Canning Basin, and the Merlinleigh project in the onshore Carnarvon Basin.
The company will be able to offer a total of 15.6 million acres-worth of permit areas to potential farm-in partners throughout three basins.
“It is our clear priority to focus our capital on our Eagle Ford development,” New Standard managing director Phil Thick said.
“Our farm-out objective for our WA assets is to find a partner to fund the next stages of exploration in each of our projects such that New Standard has no significant funding commitments in WA.
“We continue in our discussions with the Department of Mines and Petroleum to manage our commitments and maintain our permits in all areas, but given our huge acreage position, we also have the option to relinquish parts of our lease prospective permits.”
By restructuring ownership of the Southern Canning project, New Standard will no longer be required to spend over $10 million to drill a third well to complete the first phase of the joint venture agreement.
New Standard said that, under the terms of the restructure, no claims could be made by the joint venture partners for any monies spent to date, or any outstanding work yet to be undertaken.
“The net impact is that we will receive all of the joint venture acreage back for nil consideration and most importantly it will be on the bases that there will be no immediate financial obligations that can’t be managed,” Mr Thick said.
“The advice we have received is that the addition of the Southern Canning project to the farm-out package will be viewed very positively by potential partners as it will provide the flexibility to explore three prospective basins with meaningful equity positions in large acreages.”
Mr Thick said the company was preparing to drill three wells in its Atascosa project in the Eagle Ford, with the first to commence in mid-October.
New Standard shares closed 9 per cent lower at 9.1 cents per share.
