Australia's AWE Farms Into China Block

Australia's AWE Limited on Thursday announced signing of a farm-in agreement to acquire a 40% working interest in Block 09/05, offshore Bohai Basin, China, from a wholly owned subsidiary of ROC Oil Company Limited.

Block 09 /05 is located in the western part of the prolific Bohai Bay Basin in China, approximately 10km southeast of Tanggu, the largest port in China.

The block covers an area of 335 km2 with water depths from approximately 5m to 10m.

“Under the terms of agreement, AWE will pay ROC $2 million for past costs, 60% of the first exploration well and 54% of the second exploration well. Should drilling costs exceed the initial gross estimate of $14.7 million per well, AWE would then contribute at a 40% working interest,” the company said.

The first exploration well, QK11-1-1, was spudded on Thursday.

According to AWE, several other prospects and leads have been identified within the block, providing significant follow-up potential for the second commitment well, anticipated in third quarter of calendar year 2015.