VIC/P54 Operator Rejects $171 Million Hostile Takeover Bid

abarrelfullabarrelfull wrote on 08 Sep 2015 05:57
Tags:


March 29 2006

International TME Resources Inc. (OTC: ITME) announces that the operator of VIC/P54, Nexus Energy Ltd. has rejected a hostile $171 million takeover bid from Anzon Australia Ltd, describing it as inadequate. Nexus has become hot property because of the fast-maturing status of its key developments — the Longtom Gas Field on VIC/P54 in the Bass Strait, located on TME's ORRI and one other project in the Timor Sea.

The Longtom Gas Field is located in the Gippsland Basin and was discovered by BHP in 1995, but was considered sub-commercial (70-120bcf) at the time due to the lack of maturity of the gas markets and the interpreted reservoir quality. A 386+ meter gas column was intersected in the Emperor Formation in Longtom-1.

Longtom-2 was drilled in late 2004. A 400+ meter gas column was confirmed within the structure. The lower reservoir section in Longtom-2 flowed at a stabilized rate of 18-19 mmcf/day over a 12 hour period — an excellent result confirming the commercial potential of the previously untested lower reservoir
section in Longtom. The upper reservoir section did not flow gas to surface — two third party engineers confirmed a subsurface test valve did not open; hence the well could not flow against the closed valve. A core from the upper reservoir section was taken and analyzed, confirming an excellent reservoir
section highly capable of flowing gas. No gas-water contact has been intersected at Longtom to-date, suggesting deeper reservoir potential exists.

While Longtom-2 pointed to mechanical problems as the cause of poor flow rates from the main reservoir, seismic reprocessing and amplitude variation with offset (AVO) work indicates a strong gas anomaly in these sands as well as an untested anomaly in sands above the primary zone. Thus, Longtom-3 will be a multi-purpose appraisal seeking confirmation of the lateral extent of the lower reservoir as well as exploration of the anomaly higher in the stratigraphic column.

A good result from Longtom-3 would clarify the independent assessment from Gaffney Cline & Associates for the Longtom Gas Field to possibly contain estimated reserves of 316 billion cubic feet and possibly add a further 250 billion cubic feet, which at the moment is listed as possible in the upper reservoir.

TME's ORRI under VIC/P54 is located in the prolific Gippsland Basin of the Bass Strait and consists of 155,676 gross acres.

$44.2 Million Raised by Operator - Drilling Longtom-3 by June 06

TME is pleased to announce that the Joint Venture Partners of the offshore VIC/P54 have successfully raised $44.2 million. A portion of the capital raised will enable the operator to rapidly progress the commercialization of the Longtom Gas Field. The Longtom field contains an estimated 316 BCF of recoverable gas. The Longtom-3 well is expected to drill by May or June of 2006 at an estimated drilling and completion cost of approximately $A35,000,000.

About The Gippsland Basin:
In excess of 4 billion barrels of oil/condensate and 12 TCF gas reserves have been discovered in the Basin since exploration drilling began in 1964, with remaining reserves estimated at 600 million barrels of oil and 5 trillion cubic feet of gas. Current production of the basin is around 140,000 barrels per day of crude and 570 million cubic feet per day of gas. At peak rates, the Gippsland Basin can deliver more than 1,000 million cubic feet a day.

Contract Signed With Santos to Sell 320 BCF of Gas on VIC/P54

TME is also pleased to announce that the operator of VIC/P54 has signed the Longtom Gas Sales and Toll Processing Agreement with Santos. The agreement will enable the operator of VIC/P54 to process and sell up to 350 BCF of gas of gas over 12 years (with an option for additional 91 BCF of gas) from the Longtom Gas Field located in Bass Strait on TME's ORRI.

The gas from VIC/P54 will be processed through Santos existing Patricia Baleen facilities near Orbost in Victoria. This deal provides commercial certainty for the commercialization of the Longtom Gas Field and provides an optimal development solution by minimizing the cost and risk of the
development.

The Longtom Gas Sales Agreement with Santos is conditional on the successful completion of the Longtom-3 appraisal well and the operator of VIC/P54 is confident that this will be achieved.

Upon a successful completion of Longtom-3, the first gas is anticipated to flow from the Longtom Gas Field by mid 2008. Preliminary engineering studies suggest 2 wells (Longtom-3 and 4) will be sufficient to drain the contracted 320 BCF gas. Further development wells would be required for reserves beyond this. The wells will be completed sub-sea, connected via a manifold and piped 12km to Patricia Baleen facilities. Santos will process and purchase the gas from this point. The gross estimated capital expenditure is expected to be
approximately $A160 million, including the cost of drilling and completing the Longtom-3.


Related News

{"module":"feed\/FeedModule","params":{"src":"http:\/\/killajoules.wikidot.com\/feed\/pages\/pagename\/blog%3A_start\/tag\/upstream\/category\/blog\/limit\/10\/t\/My+Blog","limit":"3","module_body":"* %%linked_title%%"}}

Looking for information on the E&P sector?


Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License