Under the terms of the agreement, AWE will make an upfront payment to Key of $380,000 upon completion of the sale.
Reimbursement of L7 rehabilitation costs will amount to $1.9 million, and Key will assume operatorship of L7 and associated liabilities post completion of the sale.
“Key is delighted to have executed this agreement to acquire L7, with a proven producible oil pool and material exploration upside which is consistent with our portfolio approach,” said Key Managing Director Kane Marshall.
“Recently we have re-mapped the northern part of the Perth Basin and have not only identified prospectivity along trend from the Mount Horner Oil Field, but also identified a much larger case for the undrilled Becos prospect down-dip from our current drillable Wye Knot prospect in EP 437.
“This acquisition provides Key with not only flexibility to commercialise possible future discoveries in the EP 437 and L7 areas, but potentially revisit an area in L7 with no work program commitments where oil has been recovered from several wells but with little exploration activity for a number of years.”