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Oilex Announces Cooper-Eromanga Basins Acquisition

Source: 8/18/2019, Location: Not categorized

Oilex has entered into an agreement with Holloman Energy Corp ('HEC') to acquire its 48.5003% interest in the PEL 112 and 444 license in the world class Cooper-Eromanga Basins in South Australia.

Pursuant to the share purchase agreement entered into with HEC, the Company will acquire 100% of its wholly owned subsidiary, Holloman Petroleum Pty Ltd ('HPPL') for gross consideration of 40,416,917 ordinary shares in the Company at a deemed price of 0.3 cents and A$24,250 for a total consideration of A$145,500. The Company has issued 24,250,150 ordinary shares as initial consideration (T1) with the final balance of 16,166,767 shares and A$24,250 payable at completion, which is to occur on or before 30 September 2019 (T2). The issue of the T2 shares by Oilex is subject to shareholder approval under Listing Rule 7.1.

The Company is in discussions with the remaining holders in the License to further increase its participating interestin PEL 112 and 444.

PEL 112 and PEL 444
The Licenses are held in two Petroleum Exploration Licenses (PELs) located in the South Australia section of the Cooper-Eromanga Basins. Both blocks are located on extensions of the Western Flank oil fairway, the most important recent contributor to oil production in the Cooper Basin.

This fairway hosts over 30% of the Cooper Basin oil reserves and has been a major industry focus for new drilling and field development over the last 10 to 15 years.PEL 112 covers 1,086 sq kms and PEL 444 covers 1166 sq kms.

Each PEL is currently in temporary suspension at the request of the current License holders (a provision with the South Australian government where work obligations are suspended for a fixed period) expiring on 31 July 2019 and for which the Company understands that a further extension will be sought. The PEL’s carry an obligation to drill one well each before January 2021 (PEL 112) and January 2022 (PEL 444) respectively.

Both blocks have modern 3D seismic surveys acquired by Holloman and its partners; 127 sq km in PEL 112 and 80 sq km in PEL 444. Subsequent to the 3D surveys one exploration well was drilled in each 3D area however neither well was successful with the structural integrity of the prospects drilled in question.

Undrilled structural prospects and leads have been identified in both blocks.Oilex’s intention is to re-evaluate the 3D seismic data using advanced IP which is designed tofast track the identification of stratigraphic features and geobodies.Importantly the Western Flank discoveries include many fluvial channel features and the stratigraphic section lends itself to the development of many more stratigraphically trapped hydrocarbon pools.Additional technologies available to Oilex include rapid, lowcost reconnaissance tools aimed at testing the presence of hydrocarbon signatures in the atmosphere and in the soils overlying hydrocarbon accumulations.

The PEL’s are favourably situated given the proven westward migration of oil from the Patchawarra Trough to the Western Flank fields and particularly the presence of oil in a well just to the east of PEL 444.Oilex believes that the existing high-quality3D data coupled with advanced evaluation tools will result in the identification of new targets for stratigraphic oil pools within these licenses.

Terra Nova Energy (Australia) holds a beneficial interest in and is the operator of the Licences.

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