The farm-out formalises the Heads of Agreement signed by the two companies on 12 July 2011.
Under the farm-out agreement, ConocoPhillips will fund up to $A113.5 million over four phases of shale gas exploration work to earn and retain a 75 per cent interest in the Goldwyer Project. Assuming ConocoPhillips completes all four phases of work, New Standard’s working interest will be reduced to 25 per cent.
Additionally, ConocoPhillips will make an upfront payment of $A1 million to New Standard Energy. The farm-out agreement is subject to regulatory approvals.
New Standard Managing Director Sam Willis said that the farm-out to ConocoPhillips would accelerate exploration of the Goldwyer Project, with three exploration wells targeting liquids-rich shale gas planned for 2012.
The first phase of the farm-in program requires ConocoPhillips to fund 100 per cent of the costs to:
- Drill, log, core and suspend three vertical wells;
- Complete detailed core lab analysis of the cores from each well; and,
- Undertake formation evaluation tests for each well.
