THE DISPUTE over EP 487 in the onshore Canning basin continues this month as Oil Basins and Rey Resources await the outcome of a State Administrative Tribunal decision.
EP 487 covers some 506,200 hectares surrounding Derby, and is currently operated by Oil Basins, which holds a 50 per cent stake in the permit, which is also known as the Derby block.
Oil Basins had signed a conditional deal to off load a 25% permit stake to Octanex in 2013, but the company decided to terminate the deed of sale and cooperation on 27 January.
In its quarterly announcement, Octanex said conditions precedent to the acquisition had not been met, despite a one year extension to the deal.
The other 50% stake is held by private company Backreef Oil, though the company has made moves to sell the entire stake to fellow Western Australian player Rey Resources.
This move is being disputed by Oil Basins, which applied to Western Australia’s State Administrative Tribunal (SAT) in March 2014 to take full ownership of the permit.
Rey announced in January that it would assume both the conduct and costs of Backreef ’s SAT proceedings against the company.
In an announcement, Oil Basins said it had held “a number of meetings” with Rey between mid-December 2014 and late-January 2015, but said no agreement had been concluded to date to the satisfaction of both parties.
“The key issues are Rey’s insistence to date in (Oil Basins) dropping the SAT action and Rey’s reluctance to agree to any subsequent farmout to a third party in the joint venture operating agreement,” Oil Basins said.
Oil Basins plans to seek a farmout of EP 487 once ownership and the joint venture operating agreement is finalised, it said. Its year one work program, a 500 kilometre 2D seismic survey, was well advanced and was expected to be complete by 13 December 2015.