NORTH SYDNEY, Australia –AWE Ltd (ASX:QWE) has signed a farm-in agreement to acquire a 40% working interest from ROC Oil Co Ltd (ASX:ROC) in block 09/05 offshore China in Bohai basin.
AWE will pay ROC $2 million for past costs, 60% of the first exploration well, and 54% of the second exploration well. Should drilling costs exceed the initial gross estimate of $14.7 million per well, AWE would then contribute at a 40% working interest.
Thefirst exploration well, QK11-1-1, is under way to test a prospect identified by recent 3D seismic. Several other prospects and leads are identified within the block, providing follow-up potential for the second commitment well, anticipated in 3Q2015.
Block 09 /05 is in the western part of Bohai Bay basin approximately 10 km (6 mi) southeast of Tanggu, the largest port in China. The block covers an area of 335 sq km (129 sq mi) with water depths from approximately 5 m to 10 m (16 ft to 33 ft).
The transfer of interest is subject to normal regulatory approvals.