Rey Resource has entered in to an agreement with Backreef Oil for a 50% stake in a licence in the Canning Basin of Western Australia.
The deal, which would be worth $1.7million, is for a large exploration area in the Derby Block.
A licence for the area was recently given to both Backreef Oil and to Oil Basins who each had a 50% stake.
However the two companies are in a dispute over Backreef’s interest in the Derby Block and alleged unpaid cash bills which have occurred between the parties since 2012.
As well as the $1.7million sale, Backreef would also receive a 2% royalty pay on future production.
Rey Resources said it considers the exploration license EP487 to be prospective for hydrocarbons.
The deal is subject to conditions which include the completion of ongoing hearings in the State Administrative Tribunal (SAT) of Western Australia.
Oil Basin is currently seeking to have Backreef’s grant of title in the exploration licence overturned by the Western Australian government.
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