The two companies agreed that the date for Oil Basins to commit to taking a 20% working interest in the application for drilling reservation 1/06-7 would be extended to March 31, 2008 or no later than 14 days after Backreef Resources lists on the Australian bourse, whichever is earlier.

Minor variations to the commercial aspects of the Oil Basins-Backreef Oil deal were also made.

Oil Basins will earn its stake by funding 33% of the costs, capped at $2 million, to drill an exploration well on the Selene prospect.

Backreef Oil owner David Archibald is floating Backreef Resources as an independent company.

Backreef Resources, which recently completed its seed capital raising, is proposing to prepare and lodge a prospectus and list on the ASX during the fourth quarter of this year.

Should it raise sufficient capital to commit to at least five wells, Backreef Resources intends to sign a separate farm-in agreement with Backreef Oil for a 30% interest in DR1/06-7.

Backreef Resources also intends to contract a suitable rig to drill the Selene-1 well and a number of other nearby oil prospects.

Oil Basins has negotiated an agreement that grants its shareholders a priority entitlement of $1 million in the capital raising to assist Backreef Resources with its proposed listing.

It said the drilling of both Selene-1 and Backreef-1 wells during the fourth quarter of 2007 was now contingent on Backreef Resources successfully listing.

The company also said Backreef Oil had been formally offered the grant for the DR1/06-7, as there were no Native Title claims from the Kimberley Land Council during the statutory four-month notice period, which ended on April 20.