The Melbourne-based company today said it had executed a formal deed of variation and assignment agreement to farm-in to the JV area, which covers about 374 square kilometres and is in the northeast sector of production licence L6 in permit EP129.
The acreage is northeast of and close to the Blina, Sundown and West Terrace oil fields, it said.
Oil Basins has a 35% interest in Backreef’s prospect in the project. Operator Terratek Drilling Tools, a Golden Dynasty Resources subsidiary, has a 30% stake and Backreef Oil holds the remaining 35%. Terratek is in the process of being acquired by Arc Energy.
Oil Basins said under the variation deed, Terratek has consented to its option agreement with Backreef for a further 15% interest in the project.
Carrying out the option would see Oil Basins earn a 50% interest in the onshore Canning Basin JV area, pushing Backreef’s interest down to 20%.
If Oil Basin takes up the interest increase, it would be obligated to fund another $450,000 to the drilling of Back Reef Play prospect.
The option is open until March 31.
Oil Basins said these agreements have now been formally lodged with the Western Australian Government and royalties may be payable to third parties, European Gas and Budside.
