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PXP Energy, partners farm out 35% stake in Peru oil prospect.

MANILA, Philippines - Upstream oil and gas firm PXP Energy Corp. and its partners have taken in a new investor in the Peru oil prospect, UK-listed oil explorer Tullow Oil.

In a disclosure to the Australian Securities Exchange, Karoon Gas Australia Ltd. said the consortium owning offshore exploration Block Z-38 in Tumbes Basin, Peru farmed-out a 35 percent interest to Tullow Peru Ltd., a wholly owned subsidiary of Tullow Oil plc.

Under the deal, Tullow will fund 43.75 percent of the cost of the first exploration well amounting to $27.5 million at 100 percent, beyond which Tullow will pay its 35 percent share.

Tullow will also pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.

The farm-out agreement is subject to the satisfaction of certain licensing conditions and regulatory approvals.

Once the farm-out well is completed, Tullow will have an option to assume operatorship of the block.

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Block Z-38 sits in the heart of the Tumbes Basin, adjacent to the prolific oil producing Talara Basin which has produced 1.7 billion barrels of oil equivalent (BOE) since 1880.

The Tumbes Basin has a proven working petroleum system and evidence suggests the prospects in Z-38 are accessing the same source rocks as the giant onshore Talara Basin fields.

With the entry of Tullow Oil with a 35 percent interest, Karoon Gas Australia will own 40 percent of Block Z-38 through KEI (Peru Z38) Pty Ltd, Sucursal del Peru, while Pitkin Petroleum Peru Z-38 SRL will own 25 percent.

Pitkin Petroleum Peru Z-38 SRL is a wholly owned subsidiary of Pitkin Petroleum Limited, which in turn is a 53.43 percent-owned subsidiary of PXP Energy Corp.

Formerly Philex Petroleum Corp., PXP Energy is the exploration arm of mining firm Philex Mining Corp.

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Publication:Philippines Star (Manila, Philippines)
Date:Jan 11, 2018
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