Under the agreement, an agreed seismic program of $US6 million ($A6.5 million) in PPL 269 will be funded by Talisman and completed by November 30, while the first well in the permit will be spudded no later than January 31, 2011.

Arnett told PetroleumNews.net this would likely target the Sepalosiphon prospect, which borders on the Stanley gas field in PRL 4.

Should a second well be agreed on by the partners, this would be drilled by June 30 next year.

Talisman is also paying NGE $US1.2 million to increase its stake in PPL 268 from 15% to 50%. This permit will be covered by a $US8.3 million seismic program that will be completed by the end of November.

The joint venture will then decide on spudding a well before the end of February next year.

As part of the deal, Talisman has agreed to make its Coral Sea drilling rig available to NGE for the drilling of two wells in both PPL 265 and PPL 266.

"Part of the transaction is that we will be able to get the rig at cost and the costs that we would otherwise pay Talisman associated with the dry hire of that rig will be credited to what is known as an exploration fund," Arnett said.

This fund will enable Talisman to use any funds owing by NGE towards possible future investments in NGE's interest.

"So that's where we sit, we will be very active next year. There will be at least three wells in the first half and, potentially, if we get the timetable right, five wells," Arnett added.

Disclosure: Aspermont, publisher of PetroleumNews.net & PNGIndustryNews.net holds shares in New Guinea Energy.