Cue Energy has been granted a 12-month extension and suspension on exploration permit WA-359-P, host to the Ironbark gas prospect offshore Western Australia, entailing work commitment deferrals.
The Melbourne headquartered oil and gas company said the National Offshore Petroleum Titles Administrator had notified it of the extension, which was to allow Cue to time for detailed well planning using newly available data and preparing for drilling the Ironbark-1 well, which is targeted for 2019.
“The WA-359-P minimum work requirements included the variation to Permit Year 4 for a Detailed PSDM Pore Pressure Study, which had recently been completed,” Cue Energy said.
Cue said the extension was until April 25, 2019 and it had also received a 12-month suspension for Year 3, 4, and 5 work program commitments and a Year 4 work commitment variation on WA-359-P.
The Ironbark prospect is a giant Mungaroo Formation prospect mapped with an area of up to 400 sq km containing a best technical estimate of 15 trillion cubic feet (Tcf) of prospective recoverable gas resource, based on an internal assessment performed by Cue.
The prospect is less than 50km from the North Rankin platform (North West Shelf LNG) and in close proximity to Pluto and Wheatstone LNG infrastructure, providing “cost-effective commercialization options”.
Cue currently holds 100% equity in WA-359-P and has executed agreements with BP and Beach Energy providing opportunities to acquire 42.5% and 21% equity respectively in the permit.
While BP evaluates exercising its 42.5% option, which is a condition to the Beach agreement, Cue says it will continue to consider options for the remainder of the funding of the Ironbark-1 well, representing 25% of the estimated well cost if BP exercises its option and the Beach agreement is finalised.