Rey Resources Limited (Rey or Company) disclosed Friday that Foreign Investment Review Board (FIRB) approval has been received and all conditions precedent have been satisfied to enable Rey to farm in to Exploration Permit EP437 in the North Perth Basin, Australia.
As announced on 29 May Rey (via its wholly owned subsidiary Rey Oil and Gas Perth Pty Ltd) has executed an agreement with Key Petroleum (Australia) Pty Ltd, a wholly owned subsidiary of Key Petroleum Limited, and Caracal Exploration Pty Ltd (Caracal) whereby Rey will earn up to 43.47 percent in EP437 by contributing to 86.94 percent of the costs. This cost is to be capped at $1.57 (AUD 1.7 million) for the Dunnart-2 exploration well, which will be managed by Key as Operator of the permit. Costs over AUD 1.7 million will be apportioned between the parties in accordance with their respective beneficial interests in the permit.
On completion of the farm in to EP437 by Rey, the beneficial interests will be as follows:
Dunnart-2 Mobilization to Commence Shortly
Key as operator has today reported finalization of a formal Land Access Agreement and an executed drilling contract for Rig 7 with Drilling Contractors of Australia (DCA). Commencement of operations will begin over the next few days with surveying of the well location followed by civil earthworks for the construction of the drill pad. The assembly of office facilities are expected to commence within the next week with DCA mobilizing Rig 7 to the wellsite within a fortnight. Key further reports that based on correspondence received to date, the EP437 Joint Venture anticipates that formal drilling approvals from the WA Department of Mines and Petroleum (DMP) will be received shortly. Subsequent to this, the expected spud date for Dunnart-2 is in July.
The Dunnart Prospect is a structural closure against a fault and is defined by seven seismic dip lines and one strike line. The well is located up-dip from the historic Dunnart-1 well, with a planned drilling depth of 2,198 feet (670 meters). The Dunnart Prospect prospective resource estimate was reported by Key in its April 15 ASX Announcement under the SPE-PRMS guidelines. The Dunnart-1 well recorded excellent oil shows but was never tested. Further Information on the Dunnart-2 target is provided in the attached presentation, “Dunnart prospect”.
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