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Red Emperor Resources

Shell interest in Hawkeye

(ASX & AIM: RMP)
Informed Discussion. No ramping. No deramping.

Re: Shell interest in Hawkeye

Post Tue May 12, 2015 10:08 am

Otto owns 73.18 percent of service contract 55, while Red Emperor Resources NL holds 15 percent. Palawan 55 Exploration & Production Co. owns 6.82 percent.

PNOC–Exploration expressed interest to farm in for a 15 percent interest. It is waiting for the required approvals from the Office of the President in order to close the transaction


This implies this is not a done deal yet for rmp does it not. If I recall the original runs said that whilst rmp had taken up the 15% interest farm in, it was subject to PNOC not taking up its share. If they do does this not push rmp out.
FUBAR@Birth
 
Posts: 951
Joined: Mar 2012

Re: Shell interest in Hawkeye

Post Tue May 12, 2015 3:48 pm

Its a done deal, see below

London, March 2

2 March 2015

Red Emperor Resources NL

Farmin Agreement Signed With Otto Energy and Appendix 3B

The Board of Red Emperor Resources NL ("Red Emperor" or the "Company") is
pleased to announce that it has signed a Farmin Agreement (the "Agreement")
with Otto Energy Philippines Inc. (a wholly owned subsidiary of Otto Energy
Ltd, ASX: OEL) to farm in to the highly prospective offshore Philippines Block,
SC55.

Highlights

* Red Emperor to earn a 15% working interest in offshore Philippines Block,
SC55, by participating in the upcoming Hawkeye-1 exploration well that will
test the significant hydrocarbon potential of the Southern Palawan Basin.

* Hawkeye-1 is expected to be drilled early in Q3 2015 and is targeting a
structure assessed to contain in excess of 100MMbbls of Gross Best Estimate
Prospective Resources (~15MMbbls net to RMP).

* Independent report from Jordon & Pay Exploration Consultants describes the
prospect as a "robust, attractive exploration target with a good geological
chance of success" (32%), with the operator indicating Gross Prospective
Resource of up to 401MMbbls (High Case - 51MMbbls net to RMP).

* The Hawkeye prospect is covered by extensive and high quality 3D seismic,
which indicates the strong chance of a gas cap sitting above a sizeable oil
leg (>100m).

* Commercial success in the Hawkeye well would unlock a significant region
for exploration, the heart of which is covered by Block SC55.

* A further drill ready gas target (Cinco) also exists within Block SC55,
assessed by the Operator to have Gross Best Estimate Prospective Resources
of 1.6Tcf (208 Bcf net RMP) of recoverable gas.

* Red Emperor to complete A$2.13m placement leaving the Company fully funded
to participate in the Hawkeye-1 exploration well and other potential
opportunities.

Service Contract (SC) 55

Service Contract 55 (SC55) is located in the southwest Palawan Basin, covers an
area of 9,880km2 and was awarded to Otto Energy Investments Ltd (formerly
NorAsian Energy Ltd) in 2005.

It is a deep-water block in the middle of a proven regional oil and gas fairway
that extends from the productive offshore Borneo region in the southwest to the
offshore Philippine production assets northwest of Palawan.

Exploration and Development

SC55 contains a number of distinct exploration play types including the Hawkeye
turbidite clastic prospect and the material Cinco carbonate gas/condensate
prospect, as well as a number of follow-up leads. The permit provides a
material opportunity and a series of possible drill targets in an exploration
campaign that will be undertaken during the remaining term of the service
contract.

The Hawkeye prospect was identified on 2D seismic originally acquired by Otto
in 2007 and further defined with the 600km2 3D seismic acquisition in late
2009. Hawkeye contains a 'Best Estimate' STOIIP of ~480 MMbbls of oil and a
'Best Estimate' Gross Prospective Resource of 112 MMbbls (RMP net 14.3 MMbbls)
of oil according to the Operator, Otto Energy.

The Cinco gas/carbonate prospect was identified as part of a 1,800km2 3D
seismic program undertaken by BHPB in 2010 that focused on a trend of carbonate
prospects and leads, with Cinco being analogous to the Malampaya producing gas/
condensate field in the Philippines. Cinco contains a 'Best Estimate' GIIP of
2.4 Tcf with a 'Best Estimate' Gross Prospective Resource of 1.6 Tcf of gas and
57 MMbbls of associated condensate (RMP net 208 Bcf) and 7.3 MMbbls). The Net
Prospective Resources exclude Government Share of profit oil.

The arithmetically aggregated gas/condensate prospect and lead inventory
including Cinco, contains a 'Best Estimate' GIIP of ~17 Tcf with a 'Best
Estimate' Gross Prospective Resource of over 11 Tcf of gas (RMP net 1.5 Tcf)
and 403 MMbbls (RMP net 51 MMbbls) of condensate.

Hawkeye Prospect

The Hawkeye prospect is interpreted to be a large, relatively undeformed
Miocene aged toe thrust, analogous to offset discoveries in Malaysia. The
Miocene turbidite reservoir is likely to be tested by a well sitting in
approximately 1,690m of water. The prospect was first identified on 2D seismic
data, which was later followed up by a 3D seismic acquisition in early 2010.
The 3D data has further matured the prospect to drillable status. Hawkeye is a
well imaged, toe thrust structure of more than 500m vertical relief, 50km2 area
with attendant Direct Hydrocarbon Indicators. Multiple flat spots are evident
with an associated oil column consistent with detailed rock property analysis.

The Operator's estimate of the Hawkeye Prospective Resources is shown below:

(MMbbls) STOIIP Gross Recoverable Net RMP

Low Estimate 87 19 2.4

Best Estimate 484 112 14.3

High Estimate 1,539 401 51.1

*Source: Otto Energy

The Operator, Otto Energy, is anticipating a spud date in early Q3 2015 for the
Hawkeye-1 well. The exploration well has been designed to reach the top of
target reservoir approximately 1,000m below the sea bed floor and intersect the
gas oil contact to prove or otherwise the presence of the oil leg.

Cinco Prospect

The Cinco prospect is interpreted to be a large Nido level reef/platform
carbonate build-up, which sits on a regional high block in water depth of
approximately 1,400m. The 3D seismic acquired in early 2010 has identified a
significant number of similar structures. Success at Cinco would high-grade
many of the adjacent large analogue structures in the block, which, in
combination, would have the potential to unlock a large new gas province of LNG
proportions.

There are a number of similarities between the Cinco prospect and the largest
gas and condensate discovery in the Philippines at Malampaya, which has been
developed as the country's largest gas to power project. Both have Nido
carbonate reservoir, sit on regional high blocks and have similar seismic
character and volumetric capacity.

The Operator's estimate of the Cinco Prospective Resources is shown below:

(Bscf) GIIP Gross Recoverable Net RMP

Low Estimate 906 586 75

Best Estimate 2,447 1,635 208

High Estimate 6,327 4,319 551

* Source: Otto Energy

Managing Director, Greg Bandy, commented, "The Board of Red Emperor are
delighted to have been able to complete on a transaction that has the potential
to completely redefine the company. After extensive review of many potential
projects, the Red Emperor Board have not only taken advantage of a depressed
oil market that has seen drill rig rates halve and farm-in promotes reduce
significantly, it has concluded the robustness of the Hawkeye prospect, and
leverage to success in follow-up potential, a compelling investment opportunity
for Red Emperor and its shareholders".

COMPETENT PERSON STATEMENT

The resource estimates in this report have been compiled by Otto Energy Ltd,
the Operator of SC55, and reviewed by Mr James Jordan BSc (Hons), MSc and Dr
Mark Pay BSc (Hons), MSc, PhD. Mr Jordan and Dr Pay have consented to the
inclusion of such information in this report in the form and context in which
it appears. Mr Jordan and Dr Pay are directors of Jordan & Pay Exploration
Consultants Pty Ltd and have more than 20 years relevant resource estimation
experience in the petroleum industry. Resources have been estimated in
accordance with the SPE Petroleum Resources Management System (SPE PRMS) and
conform to the ASX listing rules.

Red Emperor is not aware of any new information or data that materially affects
the assumptions and technical parameters underpinning the estimates of
resources. The estimated quantities of petroleum that may potentially be
recovered by the application of future development projects relate to
undiscovered accumulations.

These estimates have both an associated risk of discovery and a risk of
development. Further exploration appraisal and evaluation is required to
determine the existence of a significant quantity of potentially moveable
hydrocarbons.

Key Terms of the Agreement

1. Working interest

Red Emperor Resources (Farmee) has the right to earn a 15% working interest in
Service Contract SC55 (Farmin interest) in consideration for paying, in cash,
15% of the Well Costs for the drilling and testing of the Hawkeye - 1
exploration well. Red Emperor's well cost exposure is capped at US$5.625m,
beyond which Red Emperor has the option to reduce equity from the 15% working
interest level.

2. Ownership

Assuming no further acquisition or divestment, following the assignment of the
Farmin Interest contemplated under the Agreement, the Participating Interests
shall be:

Otto Energy Philippines Inc (Farmor): 45.00%

(100% owned subsidiary of Otto Energy Limited)

Otto Energy Investment Limited (OEIL): 33.18%

(100% owned subsidiary of Otto Energy Limited)

Red Emperor Resources NL: 15.00%

Palawan 55 Exploration and Production Company: 6.82%

(a subsidiary of Trans-Asia Oil and Energy Development Corporation)

Total: 100%

PNOC-EC have expressed an interest to farm-in for a 15% working interest in
SC55. The farm-in is subject to approval by the Office of the President of the
Philippines, which is currently being sought.

3. Conditions Precedent

The assignment of the Farmin Interest is subject to the satisfaction or waiver
of the following conditions:

a. OEIL and Palawan 55 not exercising their respective rights of pre-emption
under the JOA, and otherwise

consenting to the assignment of the Farmin Interest and executing all necessary
assignment documents.

b. Receipt of approval from the Department of Energy of the Republic of the
Philippines.

c. Red Emperor obtaining any shareholder approvals required under AIM or ASX
listing rules.

If all of these conditions are not satisfied or waived within 60 days of 28
February 2015, either Red Emperor or Farmor Party may terminate the Agreement.

4. Carry Following Discovery

If:

a. an oil discovery is made by the Farmin Well; and

b. the Operator reasonably considers the oil discovery merits appraisal; and

c. a decision is taken in accordance with the JOA to drill either:

(i) a follow up appraisal well based on the outcome of the Farmin Well; or;

(ii) an exploration well ahead of an appraisal well,

as a Joint Operation (or an exclusive operation or non-consent operation in
which a party other than OEIL and Farmor participates as a consenting party)
then Red Emperor shall pay the Farmor's Participating Interest share of the
costs of the follow up well up to an amount of USD$2,000,000.

Corporate

To ensure that Red Emperor maintains a strong cash position throughout its 2015
work program, the Company has agreed to place 66,558,555 shares at A$0.032 per
share (£0.016) (the "Placing Shares") to raise approximately A$2.13m (£1.06m)
from sophisticated investors both in Australia and the UK. 708 Capital Limited,
a Sydney based full service investment advisory firm, is lead manager to the
issue and have been appointed as Red Emperor's Australian broker. Brandon Hill
Capital (formerly Fox Davies Limited) remains the Company's UK broker. The
funds raised from the placement will be used for purposes associated with the
Company's share of upcoming drilling costs in the Philippines.

Application will be made for the Placing Shares, which will rank pari passu
with the Company's existing issued ordinary shares, to be admitted to trading
on AIM, with dealings expected to commence on or around 11 March 2015. Refer to
attached Appendix 3B.

Max Capital Pty Ltd acted as corporate advisor to the Farmin transaction.

Appendix 3B

Information or documents not available now must be given to ASX as soon as
available. Information and documents given to ASX become ASX's property and may
be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30
/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

RED EMPEROR RESOURCES NL

ABN

99 124 734 961

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough
space).

1 +Class of +securities Ordinary fully paid shares
issued or to be issued

2 Number of +securities A. 66,558,555
issued or to be issued (if
known) or maximum number B. 10,000,000
which may be issued
C. 10,000,000

3 Principal terms of the Ordinary fully paid shares
+securities (e.g. if
options, exercise price and
expiry date; if partly paid
+securities, the amount
outstanding and due dates
for payment; if
+convertible securities,
the conversion price and
dates for conversion)

4 Do the +securities rank Yes
equally in all respects
from the +issue date with
an existing +class of
quoted +securities?

If the additional
+securities do not rank
equally, please state:

* the date from which
they do

* the extent to which
they participate for
the next dividend, (in
the case of a trust,
distribution) or
interest payment

* the extent to which
they do not rank
equally, other than in
relation to the next
dividend, distribution
or interest payment

5 Issue price or A. A$0.032 per share
consideration
B. as consideration for the
introduction, facilitation and
corporate advisory services
related to the SC55 transaction
and pursuant to the Corporate
Advisory Agreement dated 26
February 2015

C. as consideration for stockbroking
and advisory services and pursuant
to the Corporate Services Mandate
dated 27 February 2015

6 Purpose of the issue A. to fund exploration programmes,
related to the SC55 transaction,
(If issued as consideration working capital and expenses of the
for the acquisition of placement
assets, clearly identify
those assets) B. as consideration for the
introduction, facilitation and
corporate advisory services related
to the SC55 transaction and
pursuant to the Corporate Advisory
Agreement dated 26 February 2015.
The shares will be subject to
shareholder approval

C. as consideration for stockbroking
and advisory services and pursuant
to the Corporate Services Mandate
dated 27 February 2015. The shares
will be subject to shareholder
approval

6a Is the entity an +eligible Yes
entity that has obtained
security holder approval
under rule 7.1A?

If Yes, complete sections
6b - 6h in relation to the
+securities the subject of
this Appendix 3B, and
comply with section 6i

6b The date the security 27 November 2014
holder resolution under
rule 7.1A was passed

6c Number of +securities 39,935,133
issued without security
holder approval under rule
7.1

6d Number of +securities 26,623,422
issued with security holder
approval under rule 7.1A

6e Number of +securities N/A
issued with security holder
approval under rule 7.3, or
another specific security
holder approval (specify
date of meeting)

6f Number of +securities N/A
issued under an exception
in rule 7.2

6g If +securities issued under * Yes
rule 7.1A, was issue price
at least 75% of 15 day VWAP * Issue price is $0.032 - 2 March
as calculated under rule 2015
7.1A.3? Include the +issue
date and both values. * VWAP $0.0395
Include the source of the
VWAP calculation. * 75% of VWAP $0.0296

* Source: IRESS

6h If +securities were issued N/A
under rule 7.1A for
non-cash consideration,
state date on which
valuation of consideration
was released to ASX Market
Announcements

6i Calculate the entity's 7.1 - Nil
remaining issue capacity
under rule 7.1 and rule 7.1A - Nil
7.1A - complete Annexure 1
and release to ASX Market
Announcements

7 +Issue dates A. 2 March 2015

Note: The issue date may B. To be advised (subject to
be prescribed by ASX shareholder approval)
(refer to the definition
of issue date in rule C. To be advised (subject to
19.12). For example, the shareholder approval)
issue date for a pro rata
entitlement issue must
comply with the
applicable timetable in
Appendix 7A.

Cross reference: item 33
of Appendix 3B.

Number +Class

8 Number and +class of all 352,792,776 Ordinary Shares
+securities quoted on ASX
(including the
+securities in section 2
if applicable)

Number +Class

9 Number and +class of all 5,492,000 Unlisted Options
+securities not quoted on exercisable at £
ASX (including the 112,966 0.265
+securities in section 2
if applicable) 1,170,000 on or before 28/03/
15

Unlisted Options
exercisable at £
0.18

on or before 3/04/
15

Unlisted Options
exercisable at £
0.32

on or before 16/05/
15

10 Dividend policy (in the N/A
case of a trust,
distribution policy) on
the increased capital
(interests)

Part 2 - Pro rata issue

11 Is security holder approval N/A
required?

12 Is the issue renounceable N/A
or non-renounceable?

13 Ratio in which the N/A
+securities will be offered

14 +Class of +securities to N/A
which the offer relates

15 +Record date to determine N/A
entitlements

16 Will holdings on different N/A
registers (or subregisters)
be aggregated for
calculating entitlements?

17 Policy for deciding N/A
entitlements in relation to
fractions

18 Names of countries in which N/A
the entity has security
holders who will not be
sent new offer documents

Note: Security holders must
be told how their
entitlements are to be
dealt with.

Cross reference: rule 7.7.

19 Closing date for receipt of N/A
acceptances or
renunciations

20 Names of any underwriters N/A

21 Amount of any underwriting N/A
fee or commission

22 Names of any brokers to the N/A
issue

23 Fee or commission payable N/A
to the broker to the issue

24 Amount of any handling fee N/A
payable to brokers who
lodge acceptances or
renunciations on behalf of
security holders

25 If the issue is contingent N/A
on security holders'
approval, the date of the
meeting

26 Date entitlement and N/A
acceptance form and offer
documents will be sent to
persons entitled

27 If the entity has issued N/A
options, and the terms
entitle option holders to
participate on exercise,
the date on which notices
will be sent to option
holders

28 Date rights trading will N/A
begin (if applicable)

29 Date rights trading will N/A
end (if applicable)

30 How do security holders N/A
sell their entitlements in
full through a broker?

31 How do security holders N/A
sell part of their
entitlements through a
broker and accept for the
balance?

32 How do security holders N/A
dispose of their
entitlements (except by
sale through a broker)?

33 +Issue date N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of
securities

34 Type of +securities

(tick one)

(a) +Securities described in Part 1

(b) All other +securities

Example: restricted securities at the end of the escrowed
period, partly paid securities that become fully paid, employee
incentive share securities when restriction ends, securities
issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the
information or documents

35 If the +securities are +equity securities, the names of the 20
largest holders of the additional +securities, and the number
and percentage of additional +securities held by those holders

36 If the +securities are +equity securities, a distribution
schedule of the additional +securities setting out the number of
holders in the categories

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

37 A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38 Number of +securities for N/A
which +quotation is sought

39 +Class of +securities for N/A
which quotation is sought

40 Do the +securities rank N/A
equally in all respects
from the +issue date with
an existing +class of
quoted +securities?

If the additional
+securities do not rank
equally, please state:

* the date from which
they do

* the extent to which
they participate for
the next dividend, (in
the case of a trust,
distribution) or
interest payment

* the extent to which
they do not rank
equally, other than in
relation to the next
dividend, distribution
or interest payment

41 Reason for request for N/A
quotation now

Example: In the case of
restricted securities, end
of restriction period

(if issued upon conversion
of another +security,
clearly identify that other
+security)

Number +Class

42 Number and +class of all N/A
+securities quoted on ASX
(including the +securities
in clause 38)
GiftedBigBollocks
 
Posts: 155
Joined: Sep 2014

Re: Shell interest in Hawkeye

Post Tue May 12, 2015 4:16 pm

Still doesn't make it any clearer GG, section 2 ownership implies PNOC could take 15% interest and I read somewhere while ack this could be at expense of rmp. Happy to be wrong though.
FUBAR@Birth
 
Posts: 951
Joined: Mar 2012

Re: Shell interest in Hawkeye

Post Tue May 12, 2015 10:28 pm

Sorry Sir, I am the one and only GBB. GG is someone totally different.
GiftedBigBollocks
 
Posts: 155
Joined: Sep 2014

Re: Shell interest in Hawkeye

Post Tue May 12, 2015 11:41 pm

No probs my error, I was just being lazy and never checked my initials
FUBAR@Birth
 
Posts: 951
Joined: Mar 2012

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