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Statoil has farmed into Petrofrontier's four existing exploration permits - 103, 104, 127 and 128- as well as pending exploration permits - 213 and 252 - in the South Georgina Basin in Australia's Northern Territories in a joint venture project.
This is an early entry at scale into over 13 million acres of immature, but potentially highly prospective play at low cost, with high risk but also with significant upsides.
Through a step-wise exploration program, the partners will potentially drill 10 to 20 wells by 2017 in three phases to demonstrate prospectivity.
Petrofrontier will operate the first phase of the program while Statoil has secured options to operate from the second exploration phase in addition to increase ownership interests from 25% to 65% of Petrofrontier's interests.
Statoil has committed to contribute $25 million for the first phase of the exploration program. This figure could escalate to $200 million through a phase two and three depending on exploration results.
"These exploration activities are in line with our objective to access shale plays at an early exploration stage, at low cost and develop them into potentially high value assets. We are looking forward to explore it together with our partner Petrofrontier," said senior vice president for new ventures in Statoil, Atle Rettedal.