Emerging Perth-based oil and gas exploration company WHL Energy has signed a farm-in agreement with London-based Ophir Energy.
Ophir Energy will earn a 75 per cent interest in WHL Energy’s exploration interests offshore of East Africa at its flagship Seychelles project.
In return, WHL Energy will receive $US4 million for past costs once all conditions of the farm-in are met and a further $US2 million after drilling begins.
Ophir will spend up to $17 million for 3D seismic mapping of the Seychelles project.
Once the initial mapping is complete, or if it hasn’t occurred by December 2015, Ophir can choose to either withdraw from the farm-in or pay for more works.
This includes funding further 3D seismic mapping up to a total of $US12 million and paying for 90 per cent of the costs of the first exploration well up to a total of $US30 million.
WHL Energy managing director David Rowbottam said the company was delighted to have secured Ophir Energy as a farm-in partner.
“Having a company with the record of Ophir Energy partner together with WHL Energy to take the flagship Seychelles project forward is a tremendous milestone for the company,” he said.
“Achieving this great result has been most pleasing given the difficult farm out market and current business climate.”
After placing the company in a trading halt on February 26 in anticipation of the farm-in announcement, WHL Energy's shares jumped 18 per cent today, to 1.3 cents, after a return to trade.
