(Alliance News) - Red Emperor Resources NL on Monday said it has signed a preliminary agreement to potentially acquire a 70% interest in a large block offshore Perth, Western Australia.
Red Emperor Resources shares in London were up 57% at 0.75 pence each in afternoon trade.
The natural resource exploration company has signed a letter of intent with Pilot Energy Ltd and Key Petroleum Ltd to secure an option to acquire a 70% operated interest in the offshore Perth Basin exploration permit, WA-481-P. Currently, Pilot Energy owns a 60% interest, while Key Petroleum is the operator and 40% stake holder in the permit.
Under the agreement, Red Emperor will fund an existing committed work programme comprising geological and geophysical studies, up to a capped amount of AUD150,000, around GBP78,758.
Following completion of the work programme, Pilot Energy, Key Petroleum and Red Emperor intend to seek a five-year renewal of the permit, which currently expires on February 19, 2020.
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 square kilometres.
Subsequently to the permit extension, Red Emperor will have an option to acquire a 70% interest in and the right to operate the permit in return for paying AUD500,000 to Pilot Energy and Key Petroleum.
"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," Red Emperor Managing Director Greg Bandy said.
By Tapan Panchal; tapanpanchal@alliancenews.com
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