Rey Resources Limited (ASX: REY) has made an announcement related to the letter of intent which it has entered with Doriemus PLC with the help of the press release. As per the press release dated December 31, 2018, Rey Resources has signed a letter of intent with respect to Farmin of EP487 (or Exploration Permit 487) as well as L15 (or Petroleum Production Licence 15). The press release which was issued also stated that once the farmins get completed, Doriemus would be having 50% operating interest with respect to each asset. The top management of Rey Resources Limited reflected favourable views with regards to the agreement.Â
As per the letter of intent, Doriemus is eligible for having the 50% interest with respect to L15. It would also be having the due diligence period of 30 days. Once the due diligence gets completed and if Doriemus is pleased about the investigations which have been conducted, Doriemus would go ahead with the JOA with Rey Resources so that the agreement is formalized, and it can control the project. Doriemus need to shell out A$1 million (maximum) towards West Kora Well rework as well as flowtest so that L15 Farmin gets completed. This amount of A$1 million (maximum) should be spent in the time span of 12 months of the agreement. If Doriemus gets the responsibilities fulfilled, it would be getting 50% interest with respect to L15. It is also important to note that the responsibilities need to be fulfilled in the time horizon of 12 months from the time the letter of intent got signed.
As per the letter of intent, Doriemus is also eligible for having the 50% interest with respect to EP487, and it would be having the due diligence period of 60 days. Once the due diligence gets completed, and Doriemus is pleased with regards to the examinations which have been conducted, Doriemus would be going ahead with the industry standard JOA with the Rey Resources so that the letter of intent gets formalized and it can manage the project. The press release which got issued also contained information that if Doriemus manages to get through with the obligations in the time span of 12 months (considering the time from the signing of a letter of intent), it would be getting 50% interest with respect to EP487.
The last traded price of Rey Resources was A$0.250 per share, and the market capitalization of Rey Resources was $53.1 million.
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