Australia – Cooper – Eromanga Basins

In August 2019, the Company announced that it had acquired 100% of two Petroleum Exploration Licences in the prolific Cooper-Eromanga Basins, PEL 112 and PEL 444. The Licenses are located in the more explored 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. 

In September 2019, the Company announced that it had entered into a binding term sheet with Senex Energy Limited to acquire Senex’s 100% interest and operatorship in 27 Petroleum Retention Licenses in the Northern Oil and West Gas Fairway in South Australia. The PRLs cover 2,445 km2 (~604,000 acres) and include permits covered by the 792 km2 Cordillo 3D seismic survey acquired by Senex in 2012. The PRLs are favourably located and adjacent to discoveries and many wells with oil and gas shows. The PRLS also include the undeveloped Panning gas discovery. 

In January 2020 the Company announced a binding Heads of Agreement with Doreimus Plc for the proposed sale of all of its interests in the Cooper-Eromanga Basin to Doriemus. However, in April 2020 it was announced that the transaction would not proceed given the changed global market conditions.

A replacement transaction with Armour Energy was announced in May 2020 under which Armour will acquire 100% of the issued capital of CoEra Limited, a wholly owned subsidiary of Oilex which owns all of Oilex’s direct and indirect interests in the Cooper-Eromanga Basin. Completion of this transaction is expected on or around September 15 2020. This transaction will include the successful bid for Block CO2019-C (PELA677) awarded to a subsidiary of CoEra by the South Australian government as announced in June 2020.

UK – East Irish Sea

The East Irish Sea is a prolific basin which has produced more than 8TCF of gas to date with existing gas production from a number of fields. The area has proven conventional shallow reservoirs in shallow water near to gathering and production infrastructure which delivers gas to the nearby and recently refurbished North Morecambe Gas Production Platform and Terminal.

In December 2019, the Company announced that it had entered into a binding term sheet with Burgate to acquire a 100% participating interest in the Doyle-Peel licence (P2446) in the East Irish Sea (EIS), offshore the United Kingdom

Project Overview

The licence is in a proven gas fairway near to existing infrastructure reducing the complexity, risk and cost of development. The depth to the target reservoirs is less than 2,000 metres thus providing modest drilling costs.

The Doyle prospect consists of a tilted fault block closed on the up dip east side by the north-south trending boundary fault of the Tynwald Fault Zone. This fault down throws to the east and the footwall of Ormskirk sandstone juxtaposes Mercia Mudstone salts and shales forming a very effective cross fault seal. There is a clearly defined east-west fault bounding the southern extent. The fault block is distinguished by the strong reflection response shown on the amplitude display. The Peel prospect is a fault block occupying a structurally similar setting to Doyle and the producing Rhyl gas field. It is fault bounded to the east by the Tynwald Fault Zone, with effective cross fault and top seal provided by the Mercia Mudstone. To the south and southwest dykes have been emplaced which would provide near vertical seals. The amplitude of the Ormskirk reflector is similar in reflection strength to the Rhyl productive area providing the possibility that this indicates a gas charge. The committed work programme comprises a firm commitment by October 2021 to obtain and reprocess 50 square kilometres 3D seismic data, obtain 2,500 kms Aeromagnetic data and complete a Rock Physics study, following which the Licence has a three-year drill or drop election.

The completion of the acquisition of the P2446 licence is subject to the following conditions precedent by 31 December 2020: a) the UK Oil and Gas Authority (“OGA”) approving the assignment and transfer of the P2446 licence from Burgate to Oilex; b) the execution of applicable documents necessary to transfer the P2446 licence to Oilex; c) execution of a royalty agreement in a form acceptable to the parties; and d) the issue of the share consideration for the acquisition of Doyle-Peel receiving shareholder approval under Listing Rule 7.1.