AUSTRALIAN junior Elixir Petroleum Limited has executed a Letter Agreement with its Petra Project partner Apollo Operating LLC to extend the term of the existing farm-in agreement to June 30, 2017.

Elixir said that with new funding now in place, it is in a position to be able to complete the farm-in and earn its full 50% working interest in the 30,000 net acres under lease.

To complete the farm-in, Elixir is required to fund an initial exploration well on the Petra Project.

The company said that drilling costs in Colorado have continued to fall and the expected dry hole cost of the circa 8,000 foot Rodwell Prospect is expected to be less than US$500,000. The prospect has been defined from interpretation of existing regional data acquired by Elixir in late 2014 and two proprietary seismic surveys undertaken by Elixir in early 2015.

The company has previously announced an initial Prospective Resource for the Rodwell Prospect of 2.5 million barrels recoverable net to Elixir.

Planning is now underway for a well to be drilled in the northern hemisphere spring of 2017. The Joint Venture has three drilling permits in place and Elixir said that no further significant regulatory approvals are required to commence drilling operations.

“We continue to benefit from our strong working relationship with our US partner which has allowed the company to appropriately manage the timing of the Petra Project drilling,” Elixir managing director, Dougal Ferguson, said.