New Guinea Energy granted five year extension to PNG gas exploration licence

New Guinea Energy (ASX: NGE) has accepted an offer to extend the licence period and exploration program for its 50% owned PPL 268 in Papua New Guinea.

The offer, made by the Minister of Petroleum, allows the company to further its exploration and drilling programs in conjunction with Talisman Niugini Pty Ltd for another five years.

The highly prospective licence is part of New Guinea Energy's gas aggregation strategy in the Western Province of Papua New Guinea.

The company lodged an application to extend the licence period and exploration expenditure program for this PPL with the Department of Petroleum and Energy on 13 May 2011.

New Guinea Energy and Talisman will commit to a minimum expenditure of US$29.15 million under the submitted work and expenditure program.

Over the next five years the companies will undergo the following activities:

- Acquire 50 kilometres of 2D seismic during Years 1 & 2 of the extended period;
- Drill 1 exploration well in Years 1 & 2 of the extended period;
- Acquire 50 kilometres of 2D seismic in Years 3, 4 & 5 of the extended period;
- Drill one exploration well in Years 3, 4 & 5 of the extended period; and
- Undertake a comprehensive review of the licence and commercialisation options.

New Guinea Energy and Talisman offered to surrender 50% of its blocks in order to satisfy the requirement for extension under the Oil and Gas Act Sections 27 and 28. PPL 268 will now comprise a total of 25 blocks.

New Guinea Energy has one of the last available highly prospective, onshore, nonaligned acreage positions in South East Asia.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/21315/new-guinea-energy-granted-five-year-extension-to-png-gas-exploration-licence-21315.html