The Australia-based exploration company has signed a letter of intent with Pilot Energy and Key Petroleum
Red Emperor Resources has entered into an agreement to acquire a 70% stake and the right to operate a large offshore block in the shallow waters of the North Perth Basin, Western Australia.
The Australia-based exploration company has signed a letter of intent with Pilot Energy and Key Petroleum to secure an option to acquire the operated interest in the exploration permit WA-481-P.
Permit WA-481-P is situated adjacent to the western side of licences that host the 18 million barrels Cliff Head oil field and Xanadu oil discovery. The permit currently covers 17,457 km2.
Presently, Pilot Energy owns a 60% interest while Key Petroleum is the operator and 40% stakeholder in the permit.
Terms of the agreement between Red Emperor, Pilot Energy and Key Petroleum
Under the terms of the deal, Red Emperor will fund the completion of an existing committed work programme consisting of geological and geophysical studies, up to a capped amount of A$150,000 ($102,735).
Once the work programme is completed, Pilot Energy, Key Petroleum and Red Emperor plan to apply to the National Offshore Petroleum Titles Administrator (NOPTA) for a renewal of the permit, which expires on 19 February 2020.
Red Emperor will have the exclusive option to acquire a 70% interest and operatorship of the permit by paying the joint venture partners a sum of A$500,000 ($342,450).
The company has until 15 days after NOPTA’s approval of the permit renewal application to exercise its option.
Red Emperor said that a renewal decision is at present expected to be received in the first quarter of 2020.
Red Emperor’s managing director Greg Bandy said: “We believe the WA-481-P block is predominantly oil prone, relatively shallow, and represents the western side of a large structural trend that onshore has seen recent, material discoveries.
“The Company is well funded to take a position in this play whilst continuing to identify and evaluate additional projects that can potentially provide relatively near term, high impact drilling opportunities.”