Tap Oil Limited has entered into an agreement with Apache Energy Limited to farmout a 10% interest in WA-290-P in consideration for Apache paying a promoted share of the costs of the Zola-1 well. Tap will retain a 10% interest in the permit.

WA-290-P is located immediately south of the giant Gorgon gas field in the offshore Carnarvon Basin of Western Australia. The Zola prospect is a moderate risk feature estimated by Tap to contain recoverable gas volumes of between 0.2 and 2.0 trillion cubic feet with a mid case of approximately 1 trillion cubic feet. WA-290-P also contains the Antiope stranded gas resource of approximately 120 billion cubic feet which could be aggregated in a success case.

Under the farmout agreement, OMV Barrow Pty Ltd will also assign a 20% interest to Apache on corresponding terms. Apache will become Operator for WA-290-P and plans to make a suitable semi-submersible drilling rig available as early as Q4 2010 to drill Zola-1.

The farmin is subject to the usual Joint Venture (including pre-emption) and government approvals.

WA-290-P Joint Venture Participants Post Farmout OMV Barrow Pty Ltd: 20% Tap (Shelfal) Pty Ltd: 10% Apache Energy Limited: 30% (Operator) Nippon Oil Exploration (Dampier): 25% Santos Offshore Pty Ltd: 15%

Mr Peter Stickland, Tap's Managing Director / CEO commented: 'The farmout of WA-290-P to Apache will facilitate the drilling of the attractive Zola-1 well. Not only is Apache paying a promoted share of the costs, but they are assuming Operatorship and have a suitable rig on hire with drilling anticipated as early as Q4 2010.

Zola is a moderate risk prospect and if successful could discover volumes equal to more than three times Tap's current reserves.

The farmout of WA-290-P delivers on Tap's earlier undertaking to do so and is consistent with Tap's strategy of building a diverse portfolio of moderate cost and risk, yet high impact drilling opportunities.'

Tags: Tap Oil Limited