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Norwest joins consortium to lock in rig for Lockyer Deep test

Norwest Energy, along with JV partner and Operator, Mineral Resources, is collaborating with other Perth Basin operators to secure a drilling rig for a multi-well program commencing in the third quarter of this year.  Norwest and Mineral Resources are looking to join the consortium to secure a rig on beneficial terms to drill their highly anticipated Lockyer Deep-1 exploration well.

The JV has received a 12-month extension from the State regulator to drill Lockyer Deep-1 and the collaboration with other Perth Basin operators also looking to drill their wells should see some economies of scale kick in, in respect of pricing, terms and conditions.

The Iain Smith-led Norwest said that as many as seven wells could be drilled in total amongst the consortium members that will likely be a combination of exploration, appraisal and development wells. Strike Energy and Mitsui are the most likely parties to join with Norwest and Minerals Resources subsidiary Energy Resources to execute the rig contract.

One of the main benefits of a collaborative rig contract is to share the cost of mobilising and demobilising the rig to the Perth basin – a cost that is often prohibitive to single small operators. Splitting that cost across seven potential well locations could deliver substantial cost savings to each joint venture for a rig mobilisation bill that will most likely be in the millions of dollars.

Norwest Energy is already funded for its 20% share of the Lockyer Deep-1 well with around A$3M cash in the bank. The Lockyer Deep gas prospect is only 15kms north of Strike Resources’ huge West Erregulla gas discovery in Western Australia and Norwest said it has already locked in site access with the local landowner east of Dongara in WA.

The company said negotiations to secure a rig to drill Lockyer Deep-1 had proven difficult in the current COVID-19 climate but with the carrot of up to seven wells to be drilled, the job should take on an entirely different complexion for a drilling operator.

Lockyer Deep-1 is located in the North Perth basin where Norwest has managed to team up with Chris Ellison’s $2.6 billion market capped Mineral Resources to drill the well.  Mineral Resources holds an 80 per cent working interest in the well that is also just 15 kilometres east of Beach Energy and Mitsui’s giant Waitsia gas field.

The company said its Lockyer Deep-1 prospect has the potential to hold up to 1.12 TCF of prospective resources in its own right with Norwest’s share of that possibly being a substantial 224 billion cubic feet of gas.

 

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