Cabot Energy to relinquish PEL 629 onshore exploration licence

Cabot Energy has decided to give up its PEL 629 onshore exploration licence for the Otway Basin in South Australia.

The company’s subsidiary OuroPreto Resources has signed an agreement with South Australia’s Department for Energy and Mining (DEM) to relinquish the licence, which is expected to take immediate effect and will not involve any further costs or penalties associated with the current outstanding work programme.

However, the company has received approval to alter its commitments regarding its second year PEL 629 work programme for a nominal fee.

Work has been suspended at the PEL 629 onshore licence since June 2014 for technical work and evaluation. Cabot Energy booked the majority of asset impairment charges in 2015.

As of 31 December last year, the company assigned zero net book value to the licence.

Cabot Energy CEO Scott Aitken said: “We are grateful to DEM for agreeing to a low-cost relinquishment of this licence in South Australia.

“The management team believes it is responsible practice to focus financial and operational resources on delivering value from the company’s core assets.

“This means prioritising our Canadian land position, which has a production facility capacity of up to 10,000 barrels of oil per day, along with our highly unique, leading licence position in Italy with one billion barrels of identified prospects and discoveries.”

Cabot stated that discussions are ongoing with potential providers of finance at both the asset and the group levels.