The directors of Victoria Petroleum N.L. are pleased to announce the signing of a Heads of Agreement (HOA) with Monitor Energy Limited to drill in PEL 115 in the South Australian Cooper Basin.
Under the HOA, MHL will by paying 100% of the cost of the exploration well, Fury-1 to earn a 75% interest in the 3D defined Fury Prospect and any associated Petroleum Production Licence, if granted post drilling, in the event of an oil discovery and the right to earn a 37.5% interest in all of PEL 115. By paying 100% of the cost of drilling a second exploration well in PEL 115 on the Airacobra Prospect, MHL completes the earning of a 75% interest in all of PEL 115 and earns a 75% interest in the 3D defined Airacobra Prospect and any associated Petroleum Production Licence, if granted post drilling, in the event of an oil discovery. If the second farmin well is not drilled, MHL retains its earned interest in the Fury Prospect only.
Fury-1 will test the oil bearing potential of the Murta and Permian formations, 663 metre to the northeast of Lightning-1 which recovered slightly oil cut mud from the Murta formation when drilled in 2006. Fury-1 will be 5 kilometres to the northeast of the Victoria Petroleum operated Mirage Oil Field.
Subsequent to the drilling of Lightning-1, a remapping of the up dip Fury Prospect 3D seismic data indicates the Fury Prospect is a four way dip closed structure with the potential to contain a combined maximum unrisked P10 Jurassic and Permian resource of up to 27 million barrels of oil and 23 billion cubic feet of gas if, oil and gas are present.
PEL 115 is interpreted to contain, including the Airacobra Prospect, a remaining 31 prospects with the potential to contain a combined maximum unrisked P10 Jurassic and Permian resource of up to 34 million barrels of oil and 471 billion cubic feet of gas, if oil and gas are present.
Drilling of Fury-1 is planned to commence in mid October 2009 subject to current rig movements and the funding of the drilling by MHL.
Victoria Petroleum welcomes MHL as a future Joint Venture partner to share in the exploration drilling success that Victoria Petroleum has encountered in the South Australian Cooper basin and in PEL 115 previously in the vicinity of the Fury and Airacobra prospects.