West Oil NL has achieved a milestone in its Timor Sea exploration after farming out its 33.3 per cent interest in ZOCA 96-16 to Phillips Australasia Exploration Company.
Phillips will consider spending $10 million to drill a test well in the Coleraine prospect next year, if warranted.
West Oil will retain 10 per cent equity in ZOCA 96-16 and will be free-carried for the cost of the well. Other joint venture partners in the block are Norwest Energy (14 per cent) and Trans-Orient Petroleum (10 per cent).
West Oil managing director Charles Morgan said the Coleraine prospect could host potential recoverable reserves of 150 million barrels.
“This deal is a significant milestone in West Oil’s strategy of adding value to its extensive position and farming out to major oil and gas companies,” he said.
At the same time, Texas-based Newfield Exploration Company has agreed to acquire 250 square kilometres of 3D seismic over West Oil’s permit WA-284-P in the Timor Sea.
West Oil has also incorporated a non-renounceable entitlement issue on the basis of one-for-eight West Oil shares at nine cents per share to raise about $636,000. The company has also placed 4.8 million 9¢ shares to raise a further $435,000 for general working capital purposes.
