Santos and Drillsearch Energy have formed a joint venture to fast-track the Western Cooper Gas Project.
Under the agreement, Santos has acquired a 60% interest in the project, with both companies aiming to commercialise and expand Drillsearch’s Cooper Basin oil reserves and production.
In a statement to the ASX, Drillsearch said the 60 per cent holding in project would consist of two funding injections.
The first will see Santos fund a $75m work program of exploration, appraisal and field development works.
The second is a firm work program covering all of the outstanding firm permit work commitments, valued by Drillsearch at about $45m.
Santos vice president Eastern Australia James Baulderstone said that the agreement gave Santos liquids-rich permits with excellent near-term potential.
“The proximity of these resources to the Cooper Basin’s existing infrastructure makes these assets attractive, and demonstrates the importance Moomba’s infrastructure plays in connecting the gas resources in the region to both domestic and international markets,” he said.
“Critically, it is this unique position in the Cooper Basin which enables Santos to work with partners such as Drillsearch to accelerate the development and subsequent marketing of gas via its extensive existing infrastructure position.
"We are in the process of upgrading Moomba so that it can continue its nearly 50-year role as a pivotal hub for gas in Australia. Santos' investment in Moomba is the key that will unlock the value of fields such as these in the future," he said.
Santos also agreed to pay $15m in cash for Drillsearch's 25.8 share share of its PEL 100 asset.