Australia: Tap Oil Sells 25 pct Stake in WA-351-P to BHP Billiton

Tap Oil Limited announced on 4 May 2011 that it had agreed to sell its 25% interest in WA-351-P, offshore Carnarvon Basin, Western Australia, to Japan Australia LNG (MIMI) Pty Ltd (“MIMI”) for a cash consideration of US$30,154,000. In addition, MIMI were to pay Tap’s 20% share of the next exploration well in the permit up to a cap of US$10 million (Tap share).

BHP Billiton Petroleum (North West Shelf) Pty Ltd, Tap’s existing joint venture partner, has today given notice to Tap that it wishes to exercise its right of pre-emption to acquire the 25% interest in WA-351-P on the same terms and conditions as agreed upon with MIMI.

Tap’s Managing Director/CEO Troy Hayden said:

“BHP Billiton pre-empting the MIMI transaction provides further evidence as to the value of this highly prospective permit.  We are looking forward to working with BHP Billiton to drill the Tallaganda prospect as soon as possible, which at this stage we expect may be drilled sometime in the first half of 2012.”

Prospectivity of WA-351-P

The Operator completed a detailed assessment of the plays, prospects and leads in the permit in 2010 including the 3D seismic acquired in 2008. Over 10 leads and prospects were defined in the Triassic Mungaroo Formation which Tap estimates have a combined estimated mean potential of 2-3 Tcf (gross recoverable) of natural gas. Tap considers that a number of these targets have an estimated probability of success over 50%.

Additional leads have been identified in WA-351-P in the Jurassic and Early Cretaceous, both of which are productive elsewhere in the Carnarvon Basin. Current indications are that this shallower potential is larger but higher risk than the Triassic in this permit. Further work will be done on these objectives.

The high chance of success is reinforced by Hess’ reporting of 13 gas discoveries from 16 exploration wells drilled to date in the adjacent WA-390-P permit, immediately north of WA-351-P. Hess has commenced a multi-well appraisal program in WA-390-P.

The proximity of WA-351-P to many large-scale liquefied natural gas (LNG) projects being developed should provide the joint venture with many options for the commercialisation of any gas discoveries.

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Source:Tap Oil , June 2, 2011;