Australian oil and gas firms Warrego Energy and Strike Energy have executed a binding heads of agreement (HoA) for the joint development of the West Erregulla gas field.
The West Erregulla gas field is located in the Perth Basin of Western Australia.
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It lies within the EP469 asset, with Strike Energy holding a 50% interest and operating the asset. The remaining 50% is with Warrego Energy.
The HoA creates a path for the Phase 1 development of the project, including gas processing and plant capacity, gas balancing and sales, a final investment decision (FID), as well as the current appraisal of the drilling programme.
Warrego noted that the Phase 1 development of the project is subject to the FID being taken by the end of the first quarter next year.
It is also subject to the completion of definitive documentation for the arrangements of the gas process.
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By GlobalDataWarrego Australia executive director and CEO David Biggs, said: “The agreement between Warrego and Strike provides an aligned and efficient pathway for the development of the West Erregulla gas field.
“The construction of a single gas processing plant provides capital and operational efficiencies to both companies, as well as a smaller operational footprint. Importantly, it provides greater certainty to existing and future gas customers, regulators and stakeholders, and is another significant step in de-risking the project.
“Results from WE-3, which is currently being drilled, and WE-4 have the potential to enhance our view of reserves and resources as we move towards FID in 2021.”
Gas sales from West Erregulla are targeted for mid-2022.
In May, Strike Energy received support from the West Australian state government for its planned development of the West Erregulla discovery.
In November 2019, Strike Energy completed drilling and flow-testing operations of the West Erregulla-2 well.
