Drillsearch Ltd and Santos Ltd will form a joint venture to accelerate the Western Cooper Wet Gas project commercialisation and expand Drillsearch’s Cooper Basin oil reserves and production.
In a statement to the Australian Securities Exchange, Drillsearch said Santos would acquire a 60% holding in the project through two funding injections valued by Drillsearch at between $100 and $120 million (see Tim Treadgold's Santos fires up on LNG).
The first will see Santos fund a $75 million work program of exploration, appraisal and field development works.
The second is a firm work program covering all of the outstanding firm permit work commitments, valued by Drillsearch at around $45 million.
The groups also entered into a series of other agreements as part of the joint venture including a long-term sales price agreement.
"Gas sales pricing is confidential, however, the agreed pricing provides for both fixed-price CPI indexed gas pricing and oil-linked gas pricing," Drillsearch said.
Elsewhere, Drillsearch lifted its 11% stake in another joint venture with Santos, the Tintaburra oil field.
"As part of this series of transactions, Drillsearch will acquire from Santos a further 29% interest in the Tintaburra Joint Venture for $36.8 million increasing its interest to 40%," the group said.
Santos also agreed to pay $15 million in cash for Drillsearch's 25.8 share share of its PEL 100 asset.