Petroleum explorer Vintage Energy (ASX: VEN) has confirmed it has received regulatory approvals and secured a drilling rig for exploration of the Cervantes-1 oil well in the onshore Perth Basin in Western Australia.
The well is to be drilled by the L14 Cervantes joint venture comprising Vintage (30% equity), Metgasco (ASX: MEL, 30%) and RCMA Australia (40% and operator).
Vintage has committed to funding 50% of the drilling costs to earn its stake in any discovery within the targeted Permian reservoirs.
Metgasco will finance the remaining 50% to earn its stake.
Drilling management will be carried out by Aztech Well Construction and Ensign Australia is supplying the Ensign 970 rig, which will mobilise to site next month following its release from current operations at South Erregulla-1.
Preparatory site works at Cervantes will commence this week for the rig’s arrival, with spudding expected to occur in late March.
The Cervantes well is on trend with the Cliff Head, Jingemia and Hovea oil fields.
The structure is a high side fault trap similar to other fields in the basin and the well will target Permian sandstone reservoir targets which have previously been strong producers in the Perth Basin.
Cervantes has been assessed to contain gross recoverable prospective resources (P50) of 15.3 million barrels of oil (4.6MMbl net to Vintage).
Its chance of success (COS) has been estimated at 28% and its development opportunities will benefit from its proximity to the Jingemia oil field and processing facility.
Vintage is fully funded to meet its share of expected costs for Cervantes exploration through a single tranche placement in December of $8.5 million and a $3.44 million share purchase plan completed last month.
Managing director Neil Gibbins said the company had originally aimed to raise $2 million from the plan.
“The shareholder response to this [exercise] has been an outstanding vote of confidence in our company and in our extensive and promising program of well completions, tie-ins, seismic acquisition and drilling,” he said.