Doriemus subsidiary signs farm-out agreement over WA permit

Doriemus’ subsidiary has signed an agreement with a unit of Rey Resources to acquire a 50% interest in the L15 permit (West Kora) in Western Australia (WA).

According to the farm-out agreement, Doriemus is required to fund a $1m field development plan on the L15 permit as part of plans to bring West Kora back into production.

Rey owns a 100% interest in the 163km² L15 permit, which is located 20km east of Derby.

In addition, the companies have agreed to a form of a joint operating agreement (JOA), which comprises part of the farm-out agreement.

The executing of the JOA is linked to the satisfaction of the relevant earning obligations by Doriemus.

Once the conditions are met, Doriemus will be appointed the operator of the field.

Prior to the agreement, the parties signed a term sheet on the permit last December. Doriemus also signed a binding letter of intent to purchase a 50% interest in the onshore petroleum exploration permit block EP487 in WA.

Doriemus executive chairman David Lenigas said: “The board are excited to move from the term sheet stage of this Western Australian oil deal to the signing of the formal farm-out agreement, which comprises an agreed form joint operating agreement.

“Current plans are to pull the existing downhole equipment, work to isolate unnecessary water inflows, install a higher capacity downhole pump and rebuild existing surface infrastructure. Work on site will be limited until after the wet season, however, we plan to push on as soon as possible in our attempt to resume oil production from West Kora.”

The company has also announced the completion of the due diligence process on the EP487 proposed farm-in block, located to the south of West Kora L15 block.

Doriemus is planning to secure relevant governmental permits in order to resume oil production from Kora West. L15 is estimated to have 380,000 barrels of 2P reserves.