Global Oil & Gas Limited (ASX: GLV) has entered into a binding Heads of Agreement (HOA) with Western Gas to acquire a 25% interest in its Sasanof Prospect off the Western Australia coast.
The proposed Sasanof-1 exploration well is in exploration permit WA-519-P in Commonwealth water, approximately 207 km northwest of Onslow, Western Australia, and is scheduled to drill in Q1 2022.
The HOA will see GLV fund 50% of the cost of drilling the Sasanof-1 exploration well through a 25% acquisition of the fully paid ordinary shares in Western Gas (519 P) Pty Ltd, the licence holder for WA-519-P as well as a 25% economic interest in portions of the Sasanof Prospect in adjoining Western Gas explorations permits.
The Sasanof Prospect is on trend and updip of the Mentorc Gas and Condensate Field and nearby the Giant Gas Fields of Scarborough and Io-Jansz gas fields in the prolific Carnarvon Basin. The liquids rich, low C02 Mentorc Field is the eastern fault block and is “filled to spill” into the updip Sasanof Prospect to the west.
Western Gas has secured the Valaris MS-1 semi-submersible rig to drill the well. Drilling will commence at the earliest in mid-February 2022, subject to approvals, with an estimated total campaign duration of 25 days.
Western Gas has contracted specialist well engineering and drilling management company AGR Australia (AGR) to manage the Sasanof drilling campaign. Sasanof-1 will be a vertical well and drilled to a total depth of approximately 2,500 m in 1,070 m of water, providing a low cost, high impact exploration activity in a known and proven hydrocarbon province.
Drilling costs are estimated at US$20 million.
“The 25% earn-in to the Sasanof Project will enable the Company to be the only junior in Australia with significant exposure to the North West Shelf which in my opinion – contain some of the best drillable offshore prospects in Australia,” Global Oil and Gas Director, Patric Glovac, said.
“The low CO2, liquids rich gas potential of Sasanof could represent a key part of Western Australia’s transition to a cleaner energy economy. For GLV to now have exposure to a multi TCF and billion-barrel equivalent target of gas and condensate, the company could not be in a better position strategically to capitalise on its onshore interests in the Canning Basin, EP127 and now offshore with Sasanof.
“All shareholders should be extremely excited about the Company’s short- and medium-term prospects.”
Will Barker, Executive Director Western Gas, said they were delighted to have GLV on board to support this important drilling campaign that, on success, has the potential to be a game changer for the North West Shelf at a time of declining production and expected gas shortages.
“A discovery of the estimated size of Sasanof will provide multiple gas supply opportunities, including domestic gas, LNG backfill and expansion, and new value adding industries.
“The Mentorc discovery in 2010 was a play opener for the Barrow Delta Front. It proved that the area contains world-class reservoirs with low CO2 and high-quality gas and condensate. Building on the Mentorc discovery and armed with the latest 3D data and advanced geophysical techniques, Western Gas has been able to demonstrate that Sasanof has the potential to be another Giant Gas discovery.”