- Farm-out of 10% interest on 2 for 1 promoted basis with farm-out option of further 10% on promoted basis.
- Dempsey-1 scheduled for drilling in April-May 2017, targeting 1 trillion ft3 conventional reservoir gas underneath a producing field.
- Farm-out agreement to provide funding for up to one-third of Dempsey well costs.
- Discussions with additional potential farm-in partners and project funders for Dempsey are ongoing.
- Dempsey will be first well to test the under-evaluated Early Cretaceous gas system in the proven Sacramento Basin using 3D seismic.
- Existing critical infrastructure to be utilised to fast track development of gas reservoirs proved up during Dempsey drilling.
- Commercial potential of Dempsey Project further enhanced by rising clean Natural Gas prices in California.
- Acquisition of new leases and producing assets in Sacramento Basin well advanced.
Sacgasco’s Managing Director Gary Jeffery commented:
“This is an important transaction for Sacgasco, as it enables the Company to accelerate the drilling of our world-class Dempsey Gas Prospect in the first half of 2017.
"We are pleased to secure funding on a promoted basis for a significant part of the Dempsey well, allowing Sacgasco to conclude permitting activities and commit to the securing of long lead items for the drilling of the Dempsey well in the near-term. The farmout follows Sacgasco’s recent securing of majority Working Interest and Operatorship of both the Dempsey and Alvares Prospect. The Board is advancing discussions with additional parties interested in further funding part of the Dempsey well.
"As well as progressing the Dempsey Prospect, Sacgasco is actively strengthening its asset base with the acquisition of new leases and producing natural gas wells being considered. We expect to be in a position to update shareholders on these additional compelling opportunities very shortly.”
John Begg, Executive Chairman of BNE added:
“Dempsey fits neatly with BNE’s strategy of pursuing overlooked gas plays near active gas markets and related infrastructure. We have been pursuing entry to Dempsey for some time and are excited by both the gas resource metrics and the potential to fast track development. BNE is effectively buying into, via the drill bit, an under-capacity gas production facility sitting above a robust structure with multiple gas reservoir targets that has been defined by 3D seismic. It seems incredible that despite all the historic evidence of a deeper gas system in the gas prolific Sacramento Basin, only some 16 wells have been drilled to the levels SGC and BNE are targeting. Further, that the Dempsey -1 will be the first such well to be drilled guided by 3D seismic.”
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/17012017/sacgasco-secures-farmin-partner-for-drilling-of-dempsey-gas-prospect-onshore-california/