JUNIOR oil and gas explorer Eaglewood Energy has executed a unitisation agreement which will see the company become a formal participant in the Stanley field development in Papua New Guinea’s Western Province.

The agreement was announced in December with Eaglewood’s equity participation expected to be determined over the next few months following the exchange of data between the PPL-259 and PRL-4 (Stanley field) joint ventures.

At the time, Horizon Oil, the operator of the project, expected petroleum development licence 10 to be awarded over the Stanley project by the end of the year.

The Stanley development is a gas condensate development that is targeted to commence production in late 2015.

Horizon has indicated that initial condensate production is forecast to be about 4,000 barrels per day, while gas will be initially recycled until gas sales contracts are finalised.

Eaglewood, which is listed on the TSX Venture Exchange, already has a number of exploration licences in PNG, with several prospects having been identified on its tenure.

Eaglewood chief executive Brad Hurtubise said the company was pleased to be officially participating in the Stanley development.

“The Stanley development is the first hydrocarbon development project in the Western Province and given its proximity to PPL-259, it is strategically very important for Eaglewood to be in this project and the key infrastructure that will be constructed,” he said.

“As a condensate recovery project the economics are very positive, and can be substantially improved with a gas sales contract.”

As a participant in the project, Eaglewood can elect to market its gas with the JV or independently.

Once the company’s equity position is finalised, Mr Hurtubise said it would actively pursue local gas sales opportunities.

Eaglewood expects to fund its commitments to the JV from a combination of existing cash reserves, a bridge financing facility provided by one of the Stanley participants and additional equity from a strategic partner or capital markets. Eaglewood is also in discussions with debt providers.

The company has an operating office in Port Moresby; a technical office in Australia, and a corporate office in Calgary, Canada.