Oilex Ltd (AIM: OEX) advises that the Autoridade Nacional Do Petroleo (ANP), the Designated Authority for the Joint Petroleum Development Area (JPDA) in the Timor Sea has approved the JPDA 06-103 Joint Venture's proposal to vary the Production Sharing Contract (PSC) work program.
Under the approved variation the decision to drill the fourth commitment well on the JPDA 06-103 PSC will be at the discretion of the Operator if the third well is unsuccessful. The ANP has also agreed that the PSC may be relinquished if the Operator and the Joint Venture partners decide not to proceed with any further exploration after the third well.
The Joint Venture had proposed that the work program be varied in this way and that a further 140 square kilometer 3D seismic survey be conducted over a part of the Tutuala Lead in the northern part of the contract area to infill a gap between existing 3D survey data coverage. The location of the third well will be finalized after the acquisition and interpretation of the new 3D seismic data.
The ANP has also agreed to an extension to the exploration term with the primary term now ending on 16 January 2012.
Oilex's Managing Director, Dr Bruce McCarthy, said, "Oilex greatly appreciates the assistance and cooperation of the ANP and looks forward to completing the new work program in the prospective, albeit higher risk northern part of the contract area. The Tutuala Lead, subject to results of the infill 3D seismic survey, has the potential to contain large volumes of oil. The conclusion of the discussions with ANP and the Joint Venture regarding the remaining PSC work program reflect a practical and pragmatic approach by all parties."
The participating interests in the JPDA 06-103 PSC are Oilex (Operator) with 10%, Global Energy Inc with 20%, GSPC (JPDA) Ltd with 20%, Bharat PetroResources JPDA Limited with 20%, Japan Energy E&P JPDA Pty Ltd with 15%, and Pan Pacific Petroleum with 15%.