The Board of Red Emperor Resources NL (ASX/AIM: RMP) (“Red Emperor” or the “Company”) is pleased to advise that it has executed “Definitive Agreements” in relation to the recently announced farm-in acquisition of four (4) highly prospective leases containing a significantly large oil prospect on the Alaska North Slope.
· Red Emperor, along with its consortium partners, has executed formal “Definitive Agreements” to acquire and drill a significantly large oil prospect on the prolific Alaska North Slope
· Permitting is currently underway, ahead of scheduled drilling in 1Q2019
· The drill target is immediately adjacent to and a direct analogue of the successful Horseshoe-1/1A oil well drilled by the Repsol-led joint venture in 2017
· Horseshoe is part of the billion-barrel plus Nanushuk oil play fairway, one of the largest conventional oil fields discovered in the US in more than 30 years1
· Red Emperor to recommence trading on ASX
Red Emperor, along with 88 Energy Limited (ASX: 88E) (“88 Energy”) and Otto Energy Limited (ASX: OEL) (“Otto”) (collectively the “Consortium Partners”), has executed formal “Definitive Agreements”, including a Participation Agreement, with Great Bear Petroleum Ventures II LLC (“Great Bear”) to acquire the majority of Great Bear’s working interest in four leases on the western flank of the Alaska North Slope, specifically ADL#s 391718, 391719, 319720 & 391721; collectively the “Western Blocks”.
Pursuant to the agreement, the Consortium Partners have funded their share of a US$3,000,000 performance bond to the State of Alaska and a US$500,000 cash payment to Great Bear as part of the consideration for the acquisition of the working interests in the Western Blocks.
Further information in relation to each of the four lease areas was provided in the Company’s ASX and AIM announcements dated 25 June 2018.
In summary, as consideration for acquiring the leases the consortium partners will undertake the following:
• Provide a performance bond to the State of Alaska of US$3.0 million (RMP share US$1.05m) by 31 July 2018. RMP has provided its share of the performance bond; and
• Drill an exploration well in the Western Blocks by 30 May 2019. The performance bond will be refunded if the well is drilled by this date.
The Consortium Partners will provide the following consideration to Great Bear:
• Free carry Great Bear for a 10% working interest in the leases for the drilling, completion and production testing of an initial test well, including all associated costs such as permitting, ice road access and test production disposition;
• Pay US$500,000 (RMP share US$175,000) upon execution of the Definitive Agreements. (This has been paid);
• Pay US$500,000 (RMP share US$175,000) upon receipt of final permits necessary to drill the initial test well, in any case by no later than 31 December 2018; and
• Provide an option for Great Bear to acquire a further 10% working interest prior to the initial test well by paying its pro-rata share of all costs of the initial test well or, if exercised within 6 months of completing the initial test well, by paying 200% of its pro-rata share of all costs of the initial test well.