QUADRANT Energy Australia will withdraw from four onshore permits south of Broome under an arrangement with Buru Energy and Mitsubishi Corporation.
Quadrant, formerly Apache Energy has agreed to pay Buru and Mitsubishi a gross sum of $10 million in fulfilment of its farm in obligations over permits EP 390, 438, 471 and 473, together known as the Coastal permits.
Buru will receive $4.9 million of this payment in cash after adjustments, expected to be received by the end of September.
Quadrant had earned a 50 per cent interest in the permits under the farm-in, signed in 2013, with joint venture partners Buru and Mitsubishi each holding a 25% interest.
Both Buru and Mitsubishi will now hold a 50% stake following Quadrant’s withdrawal from the Coastal permits.
Quadrant had committed to fund a $25 million exploration program on the Coastal permits under the original agreement.
Following the Quadrant farm in, the joint venture drilled the Commodore 1 and Olympic 1 conventional oil exploration wells.
Buru said although some hydrocarbon shows were encountered, the wells were non-commercial and therefore plugged and abandoned.
The cost of these wells and other activities on the permits was substantially less than the $25 million farm in commitment by Quadrant, Buru said.
In a statement, Buru executive chairman Eric Streitberg said Quandrant’s withdrawal and the $10 million payout was an appropriate resolution to the Coastal titles farm in agreement.
“The original deal was struck in a very different oil price and operating environment, and we are pleased that the parties have come to a mutually agreeable commercial resolution,” he said.
“Our relationship with Quadrant will also continue in the context of our mutual interest and involvement in Western Australian energy supply.”
Mr Streitberg said Buru would use the $4.9 million it had been paid would be used to fund further exploration or appraisal and development programs on the company’s core areas.
The Coastal permits are located in the Canning superbasin, Western Australia.