New Standard delays drilling

Oil and gas explorer New Standard Energy has sought to assure shareholders it is committed to its projects in Western Australia after deferring all of its Canning and Carnarvon Basin drilling activity until 2015.

New Standard said it had the support of its Southern Canning Joint Venture partners ConocoPhillips and PetroChina and had been in discussions with the state government to ensure the delay did not jeopardise the tenure of its permits.

New Standard has been unable to receive stakeholder approvals required to drill its Brooke North-1 well before the wet season.

It is now renegotiating its drilling services agreement with Enerdrill to push back drilling of its wells until next year.

On its website, New Standard categorises its Canning and Carnarvon projects as frontier basins, providing its investors with "exposure to high risk, high reward exploration".

Managing director Phil Thick said New Standard and its joint venture partners remained committed to the huge prospectivity of the Canning Basin.

“We are now in a position where we will expect to have extra time to plan and implement our WA drilling program, whilst retaining the upside of our considerable acreage and the support of our global partners,” he said.

Mr Thick said while its WA projects were on ice the company would focus on developing its interests in Texas and South Australia.

Last month, New Standard finalised a $45 million debt facility with Credit Suisse to fund the company’s Atascosa project in the Eagle Ford shale region of Texas, US, where it has five existing production wells.

In December, it completed a $42.5 million farm-in agreement in the Cooper Basin in South Australia.

“Our recent transactions to secure the Eagle Ford shale and Cooper Basin acreage was driven by the need to diversify our risk and opportunity,” Mr Thick said.

“We believe (these projects) will drive shareholder value, whilst we retain our significant positions and the potential upside in the Canning and Carnarvon basins.”

At 10.24 WST New Standard shares were down 7.41 per cent at 12.5 cents.