MEO Australia Limited reported Thursday the execution of final documentation to farmout of a 30 percent participating interest in the WA-488-P exploration permit offshore Western Australia to a wholly owned subsidiary of SGX-listed Rex International Holding (Rex).
Commenting on the announcement, MEO’s Manamging Director & CEO Peter Stickland said: “MEO is pleased to have completed the farm-out of WA-488-P to Rex. Rex’s assessment provides an independent verification of the strong prospectivity of block WA-488-P. Importantly, the agreement significantly increases the potential for MEO to be fully funded through the drilling of Beehive-1.
MEO continues to engage with a number of other parties who are also evaluating WA-488-P and additional parties can be accommodated in the Permit by the current agreement.”
The execution of the farm-out agreement provide Rex with an immediate 30 percent participating interest in the WA-488-P permit while MEO retains a 70 percent interest.
The final farmout terms includes options for Rex to increase its participating interest (if MEO has not secured alternative funding) by an additional 10 percent in return for procuring full funding of a 3D seismic survey over the Beehive prospect, which Rex can increase to 20 percent if it commits by June 30 to fund the 3D Seismic Survey and paying MEO $500,000 cash.
Rex has a further option to increase its participating interest in return for procuring full funding of the proposed Beehive-1 well (if MEO has not secured alternative funding). If this option is exercised by Rex or its nominee, MEO will have a full carry through a Beehive-1 well for its residual 20 percent participating interest.
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