Karoon Gas completes Peruvian farmout to Tullow Oil

Karoon Gas Australia Ltd., Melbourne, has completed its farmout of a 35% participating interest in its offshore Block Z-38 Tumbes basin permit to Tullow Oil PLC.

Tullow has acquired the interest in return for funding 43.75% of the cost of the first exploration well, capped at $27.5 million, beyond which Tullow will pay its 35% share of the total well cost.

At completion of the deal, Tullow also will pay $2 million and a share of the block costs to Karoon that were incurred from Jan. 9, 2018, which is when the transaction was first announced. A further $7 million will be payable upon declaration of a commercial discovery and submission of a development plan to Peruvian national oil company Perupetro.

Karoon noted that planning for exploration of the Marina prospect is well advanced and drilling is now expected to begin early in 2020.

Marina prospect has a gross unrisked best estimate prospective resource size of 256 million bbl. Follow-up work in other prospects in the block could yield another 1 billion bbl of prospective resource if Marina is successful.

Karoon also has secured a technical evaluation agreement over Area 73 in the Tumbes basin, which is next to Block Z-38 and has potential for further leads.