JUNIOR explorer Rey Resources Limited has moved to take 100% operatorship of a large onshore block in Western Australia’s after reaching an agreement with acquire Oil Basin Ltd’s 50% stake in the permit.

Rey’s wholly owned subsidiary Rey Derby Block Pty Ltd has agreed to acquire the 50% interest in petroleum exploration permit EP-487 from its joint venture partner Oil Basins Ltd (OBL) in the approximately 5,000 sq. km block. Located to the north of Rey’s existing interests in petroleum exploration licences the Canning Basin, the block is considered prospective for basin centred wet gas.

As part of the acquisition agreement, Rey has agreed to waive outstanding claims of approximately $577,000 cash calls on Oil Basins in connection with past expenses incurred on the management of the Derby Block joint venture by Rey. In addition, Rey will waive outstanding claims of $32,000 for legal fees incurred by Rey in connection with a 2016 Supreme Court case concerning the transfer of operatorship from Oil Basins to a Rey subsidiary. These waivers and full settlement of claims between Rey and Oil Basins in relation to EP-487 will become effective on completion of the transaction, which is expected to occur in April 2017, subject to satisfaction of regulatory conditions.

Oil Basins told shareholders that it has decided that the Derby Block no longer remains a core asset for the company as it is not willing to fund its 50% commitment to the EP-487 work programme and is not prepared to raise the capital to do so.

The company said it will focus on the continued assessment and conceptual studies for development of the its offshore permit VIC/P47 in the Gippsland Basin. VIC/P47 contains the Judith Gas Field which is located 2km from the Kipper Field currently being developed by Esso Australia Resources, BHP Billiton and Mitsui.

OBL has previously reported that the EP-487 permit may contain up to 35.6 trillion cubic feet of recoverable gas and 908 million barrels of recoverable condensate.