In an announcement, Green Rock said the deal would give it exposure to the Backreef-1 near term production oil well, as well as granting it a stronger foothold in the Canning basin – where the producing Blina Oilfield, and Ungani Well, operated by Buru Energy, are located.
Under the deal, Green Rock will pay Oil Basins A$1.1 million, giving it the option to acquire either a 5% or 20% interest in the Backreef area, adjacent to the Blina oilfield, by buying an OBL subsidiary.
Green Rock would also pay a portion of any cased hole production testing of the Backreef-1 well that exceeded A$900,000.
If acquiring the 5% stake, held by OBL subsidiary OBL Backreef No. 5, Green Rock would make a second payment of A$625,000 to be used for possible EPT operations at Backreef-1 as well as potentially proposed new drilling operations at either the Backreef-2 appraisal well or East Blina-1 exploration well.
Under this scenario, all spending above the initial Backreef-1 production test and the additional further A$625,000 amount will be shared 95% by Oil Basins and 5% by Green Rock.
The other option is for Green Rock to spend a further A$2.5 million to increase its stake to 20%. The money would be used for the same purposes as listed above, with costs above that spending amount to be shared 80% by Oil Basins and 20% by Green Rock.
A cased hole production test on the Backreef-1 well is due to start in early May, after Oil Basins contracted Australian Drilling Services Petroleum Drilling Rig 2 in March, with a second well to be drilled in the third quarter.
Green Rock chairman Richard Beresford said the project stake acquisition would broaden his company’s activity across the Canning basin.
“We are pleased to be able to increase our footprint in the Canning basin and provide this opportunity for our shareholders,” he said.
“We will continue to pursue new opportunities with a hydrocarbon focus to add additional value to our portfolio of hydrocarbon and geothermal interests.”