PERTH-based New Standard Energy plans to offload a chunk of its exploration tenements in Western Australia after its partners in the Southern Canning Joint Venture walked away from the project.

Its partners in the Southern Canning basin joint venture (SCJV), supermajor ConocoPhillips and PetroChina, walked away from the project after drilling two wells on the permit, the company told the Australian Securities Exchange.

Assuming total ownership of the project, New Standard said the withdrawal meant the company was exempt from having to drill a third well to complete Phase 1 of the SCJV at an estimated cost of $10 million.

The ownership change will enable New Standard to package the SCP into the formal farm-out process alongside its two other 100 per cent owned projects, the Laurel project in the Canning basin and the Merlinleigh project in the onshore Carnarvon basin.

The company has engaged Miro Advisers to manage a formal farm-out process for its WA tenements, which it said would provide potential farm-in partners with significant exposure to large permit areas totalling 6.3 million hectares in three prospective basins and sub-basins.

New Standard managing director Phil Thick said the company was looking into relinquishing parts of its least prospective permits.

“The advice we have received is that the addition of the Southern Canning Project to the farm-out package will be viewed very positively by potential partners as it will provide the flexibility to explore three prospective basins with meaningful equity positions in large acreages.”

In parallel with the farm-out process, New Standard spudded the first of two back to back wells in a at the Atascosa project in Texas in late October.

“It is our clear priority to focus our capital on our Eagle Ford development,” he said.

The company also sold a 35% stake in the PEL 570 exploration licence in South Australia’s Cooper basin to Santos for $7.5 million, coupled with a commitment from Santos to meet 75% of its remaining expenditure commitments associated with $42.5 million in earn-in obligations.

Santos will assume operatorship of the project, with New Standard to retain a 17.5% share and Drillsearch Energy, through its recent acquisition Ambassador Oil & Gas, will keep 47.5%.