CALGARY, April 9 /CNW/ - Australia Energy Corp. ("AEC") is pleased to announce that its wholly-owned subsidiary, Georgina Basin Energy Pty. Ltd. ("GBE") has entered into two farmout agreements (the "Farmin Agreements") with Baraka Petroleum Ltd. ("Baraka") pursuant to which GBE can earn a 50% working interest in 7.4 million gross undeveloped acres (3.7 million net) in EP 127 and EP 128. These exploration permits offset GBE's current permits (EP 103 and EP 104) to the north, west and south in the Southern Georgina Basin, Northern Territory, Australia. GBE will be the Operator under the Farmin Agreements.
Paul Bennett, CEO of AEC stated: "This farmin allows us to more than double our strategic land holdings in the Southern Georgina Basin. EP 127 and EP 128 host some of the highest percent of Total Organic Carbon Content in the Hot Oil Shale recorded anywhere in the basin. There is also prospectively in the conventional carbonate ramp play we see on our existing lands".
Terms of the Farmin Agreements
Under the terms of the Farmin Agreements, GBE is required:
i) to meet the minimum (governmental) work commitments on EP127 and
EP128 for the year 3 work program (beginning in June 2010), being
the "acquisition of seismic data";
ii) to commence the drilling of one well to the greater of 600 metres
or 20 metres into the pre-Arthur Creek formation on either of EP127
or EP128 by the first day of the 6th month of the year 3 work
iii) to commission a resource evaluation report in respect of EP127
and/or EP128, to be prepared by a reputable engineering firm of
GBE's choice, before the date that is 4 months after the Agreement
GBE paid a $100,000 AUD security deposit for Baraka's benefit, which is to be released to GBE upon completion of requirements i) to iii) above or could be forfeited by GBE for failure to complete such requirements. In addition, within 45 days of signing the Farmin Agreements, GBE must deposit an additional $1,500,000 AUD into GBE's lawyers' trust account as evidence that it has the financial capacity to complete its obligations under the Farmin Agreements. These latter funds can be used by GBE to fund its obligations under the Farmin Agreements and are fully refundable to GBE if it wishes to cease operations under the Farmin Agreements.
Baraka is an oil and natural gas exploration company the shares of which are listed for trading on the Australian Securities Exchange. Baraka's Press Release dated April 7, 2010 can be viewed on the Australian Securities Exchange website at: http://www.asx.com.au.
AMI Agreement with Texalta
Pursuant to an AMI Agreement with Texalta Petroleum Ltd. ("Texalta"), GBE will offer Texalta the right to participate for 40% in the two Farmin Agreements. If Texalta accepts this offer, GBE's potential earned interest in the Farmin Agreements will be reduced from 50% to 30% and Texalta will be required to pay $640,000 AUS as reimbursement to GBE.
EP 103 & 104
Each of GBE and Texalta presently own a 50% working interest in EP103 and EP104 (covering approximately 5.5 million acres) in the Georgina Basin, where GBE is also the Operator. Tenders for the phase II seismic program on these lands have been received and are being reviewed. Once the final seismic program and budget have been approved and the required clearances and approvals from the NT Government and Central Land Council have been obtained, this phase II seismic program should commence in June of 2010.
SOURCE AUSTRALIA ENERGY CORP.
For further information: For further information: Matthew Philipchuk, President, Australia Energy Corp., 320, 715 - 5th Avenue SW, Calgary, AB, T2P 2X6, T: (403) 619-6790, MPhilipchuk@AustraliaEnergy.com