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Doriemus Signs Farmout Agreement for Block EP 487

Source: www.gulfoilandgas.com 3/28/2019, Location: Not categorized

Highlights • Following execution of the term sheet in relation to EP 487 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 Limited (REY).

• 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 5,058 km2 WA onshore block EP 487 as well as be appointed the operator of the permit 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 must provide evidence to REY by 30 June 2019 that it has or will have the required funding in place to drill a well on EP 487 to a depth as agreed by the parties and then Doriemus must drill a well to the agreed depth within 12 months to be assigned the interest.

• EP 487 is located only 30km east-south-east of Derby in Western Australia, and is close to existing infrastructure.

David Lenigas, Doriemus’ Executive Chairman, commented;
“This EP 487 permit is an exciting exploration play for Doriemus. The board are excited to move from the Term Sheet stage to the signing of the formal Farmout Agreement, which comprises an agreed form joint operating agreement.”

Doriemus Plc (DOR) (“Doriemus”), is pleased to announce its subsidiary, Doriemus EP487 Pty Ltd, has now signed a farmout agreement (Farmout Agreement) with a subsidiary of ASX Listed Rey Resources Limited (REY), 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 5,058 km2 WA onshore block EP 487 (EP487). Please refer to Figure 1 above 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.

Earning Obligation
REY currently owns 100% of EP487. Doriemus can secure a 50% interest in EP487 by (i) confirming by 30 June 2019 that it has or will have the necessary funding in place to drill a well on EP 487 to a depth as agreed by the parties by 30 June 2019 and (ii) then drilling the well to the agreed depth within 12 months.

Completion
Although the Farmout Agreement has now been executed, Doriemus must still satisfy earning obligations set out above before it will be assigned the 50% interest in EP487 from REY, at which point the parties have agreed the JOA (which comprises part of the Farmout Agreement) will become operational and govern the future relationship between the parties.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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