EXPLORATION, production and gas sales in Turkey account for much of the upward trend in Amity Oil’s stock price over the past four months.
EXPLORATION, production and gas sales in Turkey account for much of the upward trend in Amity Oil’s stock price over the past four months. However, Amity has concurrently tied up some very important loose ends at home, to advance its dream to become a major player in WA’s gas market.
One of these is also likely to benefit other onshore WA players and encourage increased exploration activity.
Early this month Amity’s new CEO, Howard McLaughlin, came on board, cementing board and management restructuring that has spanned two years, from the time Amity gained the go-ahead for its Gocerler gas field and pipeline development.
This followed the appointment earlier this year of Whicher Range project manager Bryce Martin.
This, in turn, came just before a Whicher Range farm-out deal in May, to Korea National Oil Corporation and Seoul City Gas company, to underpin the financing of the long-planned Whicher Range-5 well.
Amity is keen on this well, wanting to start tapping in to a potential four trillion cubic feet of gas within 30 kilometres of Busselton and not much further from the end of the Dampier to Bunbury gas pipeline.
But market conditions destroyed earlier plans to fund the drilling via a proposed Spring 2001 ASX-listing of Whicher Range Gasfields by Amity major shareholder and (now) chairman Tony Barton.
Whicher Range Gasfields was to take 31.8 per cent equity.
The final piece came into place last week when Amity overcame another hurdle, that of securing a suitable rig.
Successful drilling programs in the northern part of the Perth Basin meant Amity could not get hold of the one onshore rig in WA that could adequately handle the 4,300-metre well.
But now OD&E is willing to bring its Rig 28 to Australia from Indonesia in time for Amity to commence the 55-day drilling by mid-September, and a final contract is expected this week.
Potential production testing will be done on completion of drilling, and depending on results, Whicher Range-6 could be drilled prior to commencing the production approval process, Mr Martin said.
Although earliest development could be three years away, Amity says it has already talked with gas distributors and potential customers regarding potential major contracts.
The presence of another rig in the Perth Basin would increase exploration activity as competition drove down drilling costs, Mr Barton predicted.
It is understood another company has already negotiated for OD&E Rig 28 once Amity has completed this year’s Whicher Range drilling.
Amity is working on progressing Native Title issues for its northern Perth Basin holdings, close to producing gas fields.
Meanwhile, Mr Barton says initial market disappointment with Amity’s current drilling of Yesiltepe-1 in Turkey, is likely to turn, as the depth passes 1,400 metres.
