“The Canning Basin divestment allows Kimberley Oil to focus its financial and human resources on the company's core assets being the European coalbed and coal-mine methane projects while maintaining sufficient leverage to any hydrocarbon discoveries in the Canning Basin,” the company said in a statement.
Kimberley has signed an MOU for the sale of its interests in permits EP104, EP371, EP390, EP391, EP428, EP431 and EP436 for 35 million convertible notes in Golden Dynasty which will be distributed in specie on a pro rata basis to Kimberley Oil’s shareholders – worth around A$5 million. The notes will convert immediately to ordinary shares which Golden Dynasty then plans to list on the ASX.
Kimberley will retain a 2.5% well head royalty over the permits and will also retain 100% of the Broome oil tank farm and pipeline infrastructure.
As part of the transaction, Golden Dynasty will finance and commit to an expenditure program involving the completion of one new horizontal well and two well re-entries. The program is estimated to cost C$4.5 million (A$4.6 million).
Terratek Drilling Tools Pty Limited, containing Permits L6, L8, EP 129 (‘the Western Block’), associated assets and rights to the Kolascai Oil Solidification Process are part of the November deal in which Golden Dynasty is earning 80% by spending A$3.5 million on the drilling of Boundary Southeast -1 well. This deal has been extended by 12 months.
