Green Rock Energy (ASX: GRK) has a diversified portfolio of hydrocarbon and geothermal projects in Australia and Europe. In 2011 the company branched into exploration for hydrocarbons in the Canning Basin of Western Australia which holds potential for large volumes of conventional and unconventional gas.
Green Rock Energy (ASX: GRK) is now fully funded to acquire up to a 20% interest in Oil Basin's (ASX: OBL) Backreef Area oil play in the onshore Canning Basin after securing A$3.22 million in funding.
The company had earlier this month signed a deal to acquire between 5% and 20% of the Backreef Area, where the Backreef-1 oil discovery is expected to be production tested in early May.
Backreef-1 was drilled in October 2010 and intersected estimated net oil pay of between 12 metres and 39.2 metres.
Oil Basins had said previously that a modestly successful testing would value the Backreef Oil Pool at between A$1.8 million and A$5 million risked to itself.
It would also lead to a large reduction in risk for other mapped leads in the area that hold in-place oil of 48 million to 117 million barrels of oil.
The joint venture will also have options to follow up on the discovery by using the 2 drilling slot options included in the testing contract with Australian Drilling Services.
These additional wells will be drilled either by the ADS Rig 2 that will be mobilised from the Utopia oil field in central Queensland to carry out the Backreef testing on or prior to May 1 or the ADS Rig 6.
Green Rock said Cygnet Capital had received firm commitments from sophisticated investors for at least A$3.22 million.
This will be carried out in 2 parts, a A$1.422 million placement of 158 million shares priced at A$0.009 each and the issue of converting loans for at least A$1.8 million that convert into shares at the lesser of either A$0.009 each or the volume-weighted average price for 7 days leading up to and including the planned shareholders’ meeting at which approval for conversion will also be sought.
Green Rock will pay A$1.1 million as upfront option payment to Oil Basins.
This gives the company the option to take a 5% interest in the Backreef Area by paying an additional A$625,000 or a 20% stake by paying A$2.5 million for future operations.
Oil Basins will retain 80% of the Backreef Area and 100% of any benefits from a potential Buru Energy (ASX: BRU) back-in.