UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 19, 2008
AUSTRALIAN OIL & GAS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-26721 84-1379164
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
2480 North Tolemac Way, Prescott, Arizona 86305
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (928) 778 1450
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Disposition of Assets
REARRANGEMENT OF VULCAN JOINT VENTURE
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FARMOUT OF AC/P33
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Our wholly owned subsidiary, Alpha Oil & Natural Gas Pty Ltd, has formed a
wholly owned subsidiary named Vulcan Australia Pty Ltd (Vulcan) and has
transferred its 15% interests in each of its Timor Se permits, AC/P33, AC/P35
and AC/P39 to Vulcan. In addition, the Vulcan Joint Venture Operating Agreement,
which previously governed joint venture operations in the three permits, has
been replaced by separate joint venture Agreements for each permit. The new
joint ventures are known as Oliver Joint Venture (AC/P33), Vulcan Joint Venture
(AC/P35) and NOME Joint Venture (AC/P39).
Following these rearrangements of interests, the participants in the newly
constituted Oliver Joint Venture have entered into a farmout agreement in
relation to AC/P33 with South Australian based oil explorer and producer, Stuart
Petroleum Limited ("Stuart"), who, on obtaining the requisite approvals, will
become the Operator and 50% interest holder in permit AC/P33, host to the Oliver
oil and gas accumulation. Our interest will, as a result, reduce to 7.5%. Permit
AC/P33 is located approximately 700 kilometres west of Darwin in the
Australian-administered section of the Timor Sea. The transaction is subject to
the approval of the Designated Authority (Commonwealth of Australia) and will
not complete until that approval is obtained.
Stuart's earn-in obligations will be satisfied by sole funding the drilling of
an appraisal well on the Oliver feature, completion of engineering studies up to
Final Investment Decision for development of an oilfield and sole funding the
first $25 million of development expenditure.
The first phase of development of the Oliver field - drilling the appraisal
well, Oliver 2, and completing engineering studies - is expected cost $60
million and to be complete late in 2010.
The Oliver field, containing a column of oil, gas and condensate, was discovered
by a BHP Petroleum operated consortium in 1988. The Oliver 1 well was drilled in
305 metres of water to a depth of 3,500 metres. The well encountered the column
in the Plover Formation between 2,927 metres and 3,097 metres.
Stuart's interpretation of our joint venture's recently acquired Oliver 3D
seismic data over the Oliver field resulted in Stuart's estimated recoverable
liquids in the range of 9.9 million barrels to 33 million barrels of oil and
condensate with a mean joint venture volume of 19.3 million barrels. According
to Stuart, these estimates have been independently reviewed and confirmed.
Studies to identify development alternatives have been commenced by Stuart and
will be followed by the Oliver 2 appraisal well to confirm the size of the
field. The semi-submersible drilling rig, Songa Venus, has been contracted by
Stuart to drill this well at their cost in mid-2009. Further studies will then
determine how best to develop the field.
Equity participants in permit AC/P33, subject to and following Designated
Authority approvals, will be:
%
Stuart Petroleum Limited (Operator) 50.0
Natural Gas Corporation Pty Ltd 15.0
Auralandia NL 15.0
Vulcan Australia Pty Ltd 7.5
Petrocorp Australia Pty Ltd 12.5
In the meantime, the transaction documentation lies in escrow, pending approval
and registration of the dealing by the Designated Authority.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AUSTRALIAN OIL & GAS CORPORATION
Date: 19 September, 2008 By: /s/ E. Geoffrey Albers
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E. Geoffrey Albers
President