OBL Remains Operator of Derby Block in Canning Basin, Rey Refutes Statement

Oil Basins Limited (OBL, or the Company), a junior oil and gas exploration firm in Australia, provided Thursday an update on the Company's 50 percent owned and operated permit EP487 (Derby Block) in the Canning Basin of Western Australia so as to keep the market fully informed.

Operatorship

  • OBL wishes to advise the market that it has not resigned as Operator of EP487 and the Company continues as Operator
  • OBL has advised Rey Resources Limited (REY) and its subsidiary Rey Lennard Shelf Pty Ltd. (RLS) that RLS does not meet the agreed preconditions and minimum legal requirements to perform as Operator in accordance with the permit grant, the DMP Guidelines (July 2015) and under the Operating Agreement (JOA) executed on May 29, 2015
  • OBL has formally advised REY and RLS on Jan. 13, 2016 that RLS is in Default under the JOA with respect to a number of matters, including that RLS has not paid the outstanding cash calls for work completed between June 1, 2015 and Dec. 31, 2015
  • OBL has commenced planning and costing for the new environmental plan covering drilling and production testing, groundwater monitoring and drilling of bores (as required under the new DMP December 2015 Groundwater Guidelines) and environmental management systems. OBL is also finalizing the preparation of Year 2 AFEs in anticipation of the WP varitation approval

Separately, Rey Resources Ltd. referred Friday to the announcement made by OBL on Jan. 14 with respect to the petroleum exploration license EP487, the "Derby Block".

Rey completely refutes the matters raised in OBL's announcement. In particular, Rey refutes:

  • that it is in default under the terms of the joint operating agreement between Rey, Rey Lennard Shelf Pty Ltd. and OBL (JOA); and
  • all of the allegations with respect to the ability of Rey and its subsidiary RLS to meet any requirements to perform as Operator of the Derby Block that might exist under the JOA or otherwise

Rey will inform the market in due course of the action it proposes to take in response to these allegations.

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