Rey Resources to go it alone if JV partner scales back exploration
Rey Resources Ltd (ASX:REY) is in discussions with external financiers to shore up support for a well at its oil field in Western Australia’s north – just in case its joint venture partner decides to put the pro-ject on the back burner.
REY holds a 25% stake in two exploration areas known as ‘The Fitzroy Blocks’ which sit in the middle of a wider exploration field being developed by its JV partners Buru Energy (ASX:BRU) and subsidiaries of the Japanese giant Mitsubishi (TSE: 0858).
The main focus for the region is the Ungani Oilfield which runs through the blocks REY is involved in.
2D Seismic Survey results show drillable targets at Fitzroy
BRU has been conducting an extensive 2D survey of the Fitzroy Blocks, known as EP457 and EP458. REY says the initial interpretation of the seismic survey data provides several targets for drilling, each of them similar in scope to the discoveries made on the Ungani trend by BRU at the exploration block above EP457.
Further preliminary 2D and 3D seismic surveys are being considered to prove the area’s potential.
JV partner to review 2014 drilling
However, BRU has announced a review of its 2014 drilling programme in the region along the Ungani trend, saying it’s ranking the prospects of each of its plays to determine which should be drilled as a priority.
BRU is heavily involved in several other projects in the vicinity which are either closer to production or more advanced in exploration than the Fitzroy Blocks.
REY says if BRU decides not to drill at the Fitzroy Blocks later this year it is prepared to propose to the JV the option of seeking funding for a well. REY says the financing could take the form of an economic interest in the well or some other structure related to the Fitzroy Blocks.
The final analysis of the 234km surveyed in the 2D seismic programme is still to be completed and a work programme for 2014 is yet to be devised.
No decision has been made by BRU whether or not to proceed with drilling at Fitzroy and a choice either way is unlikely without this final set of exploration data. Nevertheless, REY says it’s continuing financial talks to gauge support for possibility of the company doing the work itself at Fitzroy.