Block L15 – Farmin:
Following execution of term sheet on L15, as announced on 31 December 2018, a wholly owned subsidiary of Doriemus has now executed the Farmout Agreement with a wholly owned subsidiary of Rey Resources.
The Farmout Agreement confirms the terms on which the Doriemus group will, subject to fulfilling certain earning obligations, be assigned a 50% interest in the 163 km2 WA onshore block L15 as well as be appointed the operator of the field pursuant to an agreed form Joint Operating Agreement which forms part of the Farmout Agreement and will become operational in conjunction with the assignment of the 50% interest.
Doriemus now plans to finalise the permits required with the Western Australian Government with the aim of recommencing oil production from Kora West.
L15 has an estimated 380,000 barrels of 2P Reserves.
L15 is located only 20km east of Derby in Western Australia.
David Lenigas, Doriemus’ Executive Chairman, commented: 'The board are excited to move from the Term Sheet stage of this Western Australian oil deal to the signing of the formal Farmout Agreement, which comprises an agreed form joint operating agreement. We still have some work to do before we look at bringing this oil field back in to production. Current plans are to pull the existingdown hole equipment, work to isolate unnecessary water inflows, install a higher capacity down hole pump and rebuild existing surface infrastructure. Work on site will be limited until after the wet season, however we plan to push on as soon as possible in our attempt to resume oil production from West Kora.
'“We have also completed the due diligence process on the larger EP487 proposed farmin block, to the south of West Kora L15 block, and the parties aim to provide a further update on the status of that farmin deal shortly.'
Doriemus has announced that its subsidiary, Doriemus L15 Pty Ltd, has now signed a farmout agreement with a subsidiary of ASX Listed Rey Resources, whereby Doriemus will, once it satisfies the earning obligation as set out below, earn a 50% interest (as well as be appointed the operator) in the 163 km2 L15 permit ('West Kora'). Refer to Figure 1 below for location.
The parties to the Farmout Agreement have also agreed a form of a joint operating agreement ('JOA') which comprises part of the Farmout Agreement which will be executed and become operational once Doriemus has satisfied the relevant earning obligations.
REY currently owns 100% of L15 and Doriemus can secure a 50% interest in L15 by funding a $1 million field development plan over the following year on the L15 permit which would be aimed to bring West Kora back in to production.
Although the Farmout Agreement has now been executed, Doriemus must still satisfy certain earning obligations before it will be assigned the 50% interest in L15 from REY, at which point the parties have agreed the JOA (which comprises part of the Farmout Agreement) will become operational.
L15 is a production licence granted in 2010 and contains the West Kora oilfield with production history (noting the last time the well was in production was in 1996).
Reserves and Resources:
As previously announced on 31 December 2018, an estimation of oil reserves and contingent oil resource for the West Kora Oilfield in L15 was provided by Energetica Consulting in September 2015 (refer to Key Petroleum’s ASX releases dated 30 September 20152) and reviewed by REY and released by REY on 14 May 2018. The estimation is based on the vintage wells in the permit and relevant studies. The estimated remaining reserves and resources, as calculated by Energetica Consulting in September 2015, are listed in Table 1 below.