Sacgasco Limited (ASX: SGC) (“Sacgasco” or “the Company”) has secured an exclusive option to acquire 100% of the issued capital of RL Energy Pty Ltd (“RL”). RL previously signed a Farm-in Agreement dated 2 May 2018 with Asset Energy Pty Ltd (“Asset Energy”) to earn a 60% Working Interest in Petroleum Exploration Permit PEP11 (“PEP11”) located in the offshore Sydney Basin by carrying Asset through defined Farm In Works. Asset Energy which is a wholly owned subsidiary of MEC Resources Ltd (ASX: MMR) investee Advent Energy Ltd, presently holds 85% of PEP11 and is Operator of that title.
Sacgasco through the execution of this agreement agrees to fund RL in their endeavours to advance the Farm In Works for the highly prospective Sydney Basin, develop an agreed work programme as required under the Farm-in Agreement, and work with JV partners to explore the permit.
Under the plan, RL and Sacgasco will support the lodging of the Environment Permit (“EP”) for 3D seismic acquisition, with Sacgasco funding the estimated cost of $326,000 for the EP.
Sacgasco Managing Director Gary Jeffery commented:
“Sacgasco has discovered another exciting opportunity that fits the Company's strategy. We are pleased to diversify the Company's asset base by working in Australia to develop the offshore Sydney Basin. It is not often that highly prospective and under-explored multi-Tcf opportunities on the doors of an energy-hungry major population and industrial centre come available.
“This project gives us an opening to provide gas to a market that is chronically under-supplies on Australia's East Coast. We are also delighted to welcome Greg Channon to the Board, an oil and gas executive with excellent technical experience that adds considerable bench strength to our team.
“The Sacramento Basin remains our first priority and key focus area as it has all the attributes to deliver real near-term value for shareholders. I expect we will have further news on our California activities imminently.
“The exclusive option on PEP11 provides a separate and very attractive option that is consistent with Sacgasco's strategy.”
RL Energy Founder and Director Greg Channon commented:
“This is a great deal for both RL Energy and Sacgasco. The Agreement will help the PEP11 project move forward with the experience and support of a strong oil and gas team. PEP11 has the ability now to fund future work programs and work towards filling the gap in a grossly under-supplied gas market on the East Coast.
“RL Energy believes there is potential to discover natural gas in PEP11 and anticipates the 3D seismic will confirm a multi-Tcf drillable prospect. If successfully drilled, the permit will have a significant positive impact on the Australian East Coast gas and energy markets, which will have a positive flow-on effect to consumers who are currently suffering through some of the highest gas prices in recent years due to the lack of domestic supply available to local customers.”