According to OVL chairman Subir Raha, "The stake in block WA 306 P in the North West shelf, offshore Australia, is our first acquisition in Australia and we believe this opening should pave way for OVLs participation in many other opportunities in the Australian hydrocarbon sector. The block has a good potential and we expect to spud the first well in the coming few weeks."
Antrim Energy, which currently holds 87.5 per cent stake in the block, estimates up to 500 million barrels of recoverable oil in the block. The first well in the browse basin of the North West shalf could yield 150 million barrels of recoverable oil. Magellan petroleum (WA) pty Ltd holds the remaining 12.5 per cent interest.
While OVL is not paying any money for the acquisition, it will carry the entire cost of drilling of the first exploratory well on the block, likely in September.
In the event of a discovery in the block, OVL will get to recover the cost of the exploration first. The produce thereafter will be shared among the partners in proportion to their shareholding.
Australia is the eighth country OVL has set its foot in. It already has oil and gas assets in Myanmar, Vietnam, Iran, Iraq, Syria, Libya, Sudan and Angola.
The exploration block, spread over 4,600 sq km, contains a cluster of drilling prospects in Barcoo sub-basin. OVL signed the farm-in agreement on August 27. The acquisition will become final, after approval by the Australian government.
With this acquisition, OVL has started extending its area of operation with presence in the hitherto sparsely-explored regions of the Browse basin. Antrim Energy, a company listed on the London and Toronto stock exchanges, is located in Calgary, Canada and has interests in North Sea, South America, Africa and Australia.