The joint venture involves QGC farming into and acquiring a 60 per cent interest in Drillsearch’s ATP 940P permit area, covering over 2,000 square km of the Central Cooper Basin Nappamerri Trough Shale Gas Fairway.

The Cooper Basin shale gas exploration joint venture is QGC’s first shale gas investment in Australia.

Drillsearch Chairman Jim McKerlie said “With the farmin by QGC and exercise of the options, Drillsearch’s share of this unconventional exploration and appraisal program is fully funded.

“We are encouraged by the three oil exploration successes in the western flank of the Cooper Basin and progress of Western Cooper Wet Gas which is looking to start production later this year,” Mr McKerlie said.

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All Native Title and environment approval processes necessary for the award of ATP 940P to Drillsearch have been completed and the formal award of the permit is currently pending Queensland Government ministerial approval.

Key features of the transaction include:

  • Execution of a farmin whereby QGC is committing to a five-year $A130 million three-stage exploration and pilot production appraisal program to acquire a 60 per cent interest in ATP 940P;
  • Drillsearch will hold the remaining 40 per cent through exploration and pilot production appraisal stages, after which QGC will have the right to become operator of the joint venture to take the shale and tight gas resources through to full scale development; and
  • QGC will fund $A90 million of the first $A100 million of the five-year exploration, appraisal and pilot production program. After this period QGC and Drillsearch will fund the program on a 60-40 basis.