Rey Resources’ subsidiary Rey Lennard Shelf (RLS) has agreed to acquire a 50% interest in the EP487 petroleum exploration licence, the Derby Block, in Western Australia’s Canning Basin.
Located north of Rey’s existing petroleum exploration licenses in the Canning Basin, the 5,000km² Derby Block exploration licence is a joint venture (JV) between Backreef Oil and Oil Basins.
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RLS will acquire Backreef’s 50% interest in the project for either $2m on grant of a production licence or a 2% royalty on future production.
Rey said it considers EP487 to be prospective for hydrocarbons and is looking forward to working with Oil Basins to develop the Derby Block.
Backreef and Oil Basins are presently disputing Backreef’s stake in the project, reportedly due to unpaid cash calls.
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The deal is subject to certain conditions, including the resolution of the dispute and the termination of any existing agreements to sell the project elsewhere.
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By GlobalDataRLS has agreed to assume the conduct of, and bear the costs of, the State Administrative Tribunal (SAT) proceedings and outstanding legal claims on Backreef by Oil Basins in the Western Australia District Court and Magistrates Court, regarding the expenses incurred on management of the Derby Block to date.
It is anticipated that, upon completion of the acquisition, RLS and Oil Basins will form a JV to develop the Derby Block.
Oil Basins operates EP487, which was granted by the Western Australia Government in March.
It is very much under-explored with just three deep vintage petroleum exploration wells within the permit area.
Image: Location of the Derby Block and Rey’s other oil and gas interests in the Canning Basin. Photo: courtesy of Oil Basins.
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