Petrobras snags 50% stake in Austalian North Carnarvon Basin block from MEO

Source: Petrobras

Petrobras (PBR) acquired from MEO Australia 50% of participating interest in the exploratory block WA-360-P, located in the Australian North Carnarvon basin, for the amount of US$ 39.0 million. The acquisition of 50% equity stakes in a block in the Australian exploratory basin of North Carnarvon represents Petrobras’ arrival in Oceania, the only continent on which the Company did not have operations.

The block covers an area of 1.2 km2, with water depth of 500 meters, and is located near an area of significantly gas discoveries. The concession contract is in the fifth year of the exploratory period and 450 km2 of 3D seismic has already been performed. The seismic analysis indicated good potential for gas discoveries.

The farm-in contract, which is subject to the Australian regulatory authorities’ approval, also consider that Petrobras will fund 100% of the drilling expenses of the first well Artemis-1, limited to $ 41 million. The drilling is scheduled for the second half of 2010.

In case of a successful discovery, Petrobras will also pay a bonus of US$ 31.5 million to MEO and will carry MEO's participation (20%) of the cost to drill two additional wells, capped at US$ 62 million per well.

MEO will remain as operator of the block, with 20% interest, and the Australian companies Cue Exploration Pty Ltd and Moby Oil & Gas Ltd. will keep its interest of 15% for each company. Petrobras has the option to become the operator after the completion of the first well.

The acquisition is aligned with the Company's strategic plan as it can contribute to increase the Petrobras' reserves and natural gas production and to reinforce its global and integrated position in the LNG market.

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