Ireland-based oil and gas explorer Clontarf Energy has acquired 10 percent of an offshore gas property in Western Australia for $4 million.
The Sanasof project is a 2500 meter deep, multi-trillion cubic foot project owned and operated by Australian company Western Gas.
Western Gas plans to start drilling this month or June, Clontarf said in a statement Monday.
Drilling is expected to cost approximately $20 million, of which Clontarf is funding $4 million.
If the cost is exceeded, Clontarf will be responsible for 20 percent of an additional $5 million allocated for that purpose and 10 percent of any cost in excess of that level.
The $4 million acquisition includes 100 million common shares at 0.25p each, valued at £480,000 on 6 May. The acquisition does not require shareholder approval.
If oil is discovered in the well, the consideration will increase by 150 million common shares to a maximum of £8.7 million, or 80 percent of the market cap, which requires shareholder approval, Clontarf said on Monday.
Located off the coast of Western Australia, the Sasanof Prospect covers an area of up to 400 km2 and is estimated by independent energy consultant ERCE to contain 7.2 trillion cubic feet of gas and 176 million barrels of condensate with a 32 percent probability of success.
Clontarf is earning a 10% interest in the property from Western Gas, which will hold 52.5% of the drilling license after the acquisition.
Other partners are the Australian-listed companies Global Oil and Gas (25 percent) and Prominence Energy (12.5 percent).
The purchase will be funded from Clontarf’s existing cash balance after completing a £3.5m share placement last month.
Clontarf chairman David Horgan said the move presents an opportunity to explore large potential gas deposits in a safe jurisdiction.
“International gas prices have risen sharply since the end of 2021 – especially in Europe and Asia.
“This is partly due to geopolitical issues, although an underlying concern is the tightening balance between supply and demand.
“Underinvestment in new gas developments since 2014 – exacerbated by the [Covid-19] Pandemic – have left key markets undersupplied as gas demand recovers.
“Investments in intermittent renewable power generation require the support of reliable generators, of which gas-fired turbines are the most flexible and efficient.”
https://www.independent.ie/business/irish/clontarf-energy-acquires-10pc-stake-in-western-australian-gas-prospect-41629927.html Clontarf Energy acquires a 10% interest in a gas field in Western Australia