EXPLORATION company AWE will acquire an exploration stake in China’s offshore Bohai basin for US$2 million and the obligation to meet some expenses after signing a farm-in deal with Australia’s Roc Oil.
Under the farm-in agreement, which will see the company acquire a 40 per cent stake in Block 09/05, AWE will meet 60% of the costs of drilling the first exploration well and 54% of drilling the second.
Should drilling costs exceed the initial gross estimate of US$14.7 million per well, AWE would then contribute at a 40% working interest, the company said.
Roc spudded its first exploration well on the permit in August, with AWE saying it expected the second commitment well would be drilled in the third quarter of 2015.
The block covers 33,500 hectares with water depths of between five and 10 metres.
AWE managing director Bruce Clement said the farm-in was an important milestone, representing an ideal platform for expansion into China.
“The opportunity is consistent with AWE’s exploration strategy to strengthen our prospect inventory by adding quality acreage within the Asia region,” he said.
“AWE believes that the partnership with Roc (an established operator within China) will provide mutual benefits to both companies.”