Cue Energy Resources Ltd. (ASX: CUE) subsidiary Cue Exploration Pty Ltd. has executed agreements to farm out some of its interest in North West Shelf exploration permits WA-409-P and WA-359-P offshore Western Australia to BP Developments Australia Pty Ltd., a news release said.

The assets are located in the Carnarvon Basin.

The deal is subject to government approval and completion of standard due diligence, Cue Energy said in the release.

BP will acquire 80% equity, become operator of WA-409-P and fund 100% of the work program required under the permit for the first three years of the license renewal, according to the release. BP also has an option through to May 2017 to acquire 42.5% equity in WA-359-P. If BP exercises this option, 50% of the cost of drilling a well in WA-359-P will be funded.

BP will assist Cue in securing a partner or partners with the credibility, funding and technical expertise to join them to drill an exploration well in WA-359-P, scheduled for first-half 2018, the release said.

Post completion, the participants in WA-409-P will be: BP Developments Australia Pty Ltd 80% (Operator) and Cue Exploration Pty Ltd 20%.

The Ironbark prospect straddles WA-359-P and WA-409-P. The giant Mungaroo Formation prospect is estimated to have about 15 trillion cubic feet of prospective recoverable gas resources.

Cue said it completed a comprehensive regional study using 15,000 sq km of 3-D and 2-D seismic data and 17 well ties to map the Triassic intra-Mungaroo sands (as encountered at the Gorgon gas field) and identified the prospect, which is less than 50 km from the North Rankin platform (North West Shelf LNG) and near Pluto and Wheatstone LNG infrastructure, providing cost effective commercialization options, Cue said in the release.