Buru Energy and Rey Resources have signed separate agreements to acquire interests in two onshore petroleum exploration permits in the Canning Basin in Western Australia from Mitsubishi’s subsidiary Diamond Resources (Barbwire) (DRB).
Under an agreement, Buru Energy will acquire additional interests in the EP 457 and EP 458 permits through its subsidiary Buru Fitzroy, in order to increase its existing stakes in each field from 37.5% to 60%.
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Buru will pay $720,000 to DRB in exchange for the stake in the permits. The completion of the transaction is subject to receipt of approvals and registration by the regulatory authority.
Once the transaction is completed, Buru Fitzroy will assume operatorship of the permits.
Buru Energy executive chairman Eric Streitberg said: “Although at an early stage of exploration, they contain a number of high potential trends, including the Ungani Dolomite, the Reeves formation, and the deeper carbonate sections, including the Nullara and Pillara formations.
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By GlobalData“There is also evidence of salt tectonics along the Jurgurra Terrace which has the potential to open up a new exploration play.
“The conventional oil prospectivity of the permits was demonstrated by the Victory 1 well drilled by the then-joint venture in EP 457 in 2015 where Laurel sourced oil was recovered.”
Meanwhile, Rey subsidiary Rey Oil and Gas agreed to increase its interests in the permits from 25% to 40%.
According to an existing joint venture funding agreement, part of Rey’s working interest is subject to a free carry loan jointly funded by Buru Fitzroy and DRB until a production licence is awarded. Rey will fully repay the loan amount from production.
Following the closure of the transaction, Buru and Rey will finalise the exploration programme for the permits.
