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Central Petroleum and Santos have partnered to spend up to AUS $150 million (US $154 million) for the further exploration and potential development of up to 13 permit/application areas in the Amadeus and Pedirka basins in central Australia.
Under the farm-out agreement, Santos will fund exploration by investing an initial $30 million (US $31 million), with options to invest an additional $60 million (US $62 million) in stage two and another $60 million in stage three, according to a news release. In return, Santos will earn rights to up to 70% of the area totaling nearly 80,000 sq km (30,888 sq miles). Santos will assume operatorship of the fields during exploration and in the event that they are developed.
Central will benefit from a free carry, assuming Santos agrees to advance at each of the exploration stages. This will effectively fund the exploration requirements of the permits, which would otherwise be obligations on Central shareholders, the release said. Central also retains an interest of at least 30% of the permits/applications. Central retains 100% interest in more than 2 million acres in EP115 in the Amadeus basin, including the area around the Surprise discovery.