Buru Energy Limited has entered into binding agreements with Mitsubishi Corporation ('MC') and Apache Energy Limited ('Apache') pursuant to which an Apache subsidiary will farm-in to a number of the joint venture's exploration permits in the Canning Basin. The permits principally cover the Goldwyer Shale areas of the joint venture's portfolio, and are prospective for shale oil and gas as well as for conventional sandstone reservoirs, particularly in the southern areas.
Under the agreements, subject to satisfaction of certain conditions:
◾ Apache will earn a 50% interest in exploration permits 390, 471 and 473 and up to a 50% interest in exploration permit 438 ('Coastal Permits') by agreeing to fund a A$25 million exploration program to be conducted on the Coastal Permits during 2014.
◾ Apache will be granted an option to earn a 40% interest in exploration permits 472, 476 and 477, up to a 40% interest in exploration permit 478 and up to a 50% interest in exploration permit 474 ('Acacia Permits').
◾ Apache will pay Buru and MC a non-refundable option fee equal to the greater of (a) $7.2 million and (b) 80% of the costs of the 20,000 sq km aerogravity survey currently being conducted by Buru and MC over the Acacia Permits (excluding exploration permit 474) and a 650km seismic survey planned to be conducted by Buru and MC on the Acacia Permits (excluding exploration permit 474) in 2014.