New deal brings hope after supermajor bows out

VICTORIAN company Oil Basins has received a lifeline from oil and gas explorer Octanex after supermajor Fortescue Metals Group reneged on a multimillion-dollar investment deal last month.
The Fortescue deal comprised an initial $4.2 million investment — an 18 per cent stake and 25 per cent priority farm-in rights to the Derby Block exploration permit in the Canning Basin — but was terminated following reported disagreements about conditions.
Octanex pounced a week later, increasing its stake in Oil Basins from about 2.2 million shares to 17.2 million.
The company also secured 15 million new free-listed Oil Basins options, directly owning 3.02 per cent of the company.
“By contrast with the prior proposed transaction, the present transaction is more of benefit to Oil Basins and its shareholders,” a company statement said.
The new deal leaves Oil Basins with a higher free float at 90 per cent, compared to 75 per cent under the Fortescue agreement.
Oil Basins also agreed to divest a 25 per cent interest in the Derby Block to Octanex for $1.75 million.
The Derby Block is yet to be granted to Oil Basins by the Department of Mines and Petroleum WA, but approval is anticipated in February or March.
However, the company was recently granted consent by the National Native Title Tribunal to explore the block, and heritage surveys will be conducted.
Oil basins stated that money from the sale would be used to conduct a 2D seismic survey during the first two years of the Derby Block program. Oil Basins does not need shareholder approval, making the terms of the transaction certain.

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