Key Petroleum has executed the sale and purchase agreement (SPA) to acquire AWE Perth’s 100% interest in production licence L7 (R1), located onshore Perth Basin in Australia.

The development comes after an agreement was reached regarding the binding terms for the acquisition earlier this year.

Under the SPA, once the sale is completed, Key will receive an upfront payment of A$0.38m ($0.29m) from AWE.

The acquisition comprises the Mount Horner Oil Field.

Key Petroleum managing director Kane Marshall said: “Key is delighted to have executed this agreement to acquire L7, with a proven producible oil pool and material exploration upside, which is consistent with our portfolio approach.

“Key is delighted to have executed this agreement to acquire L7, with a proven producible oil pool and material exploration upside, which is consistent with our portfolio approach.”

“Recently we have re-mapped the northern part of the Perth Basin and have not only identified prospectivity along trend from the Mount Horner Oil Field, but also identified a much larger case for the undrilled Becos prospect down-dip from our current drillable Wye Knot prospect in EP437 and on trend from the Dongara Oil Field spills into the adjoining L7 permit.

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“This acquisition provides Key with not only flexibility to commercialise possible future discoveries in the EP437 and L7 areas, but potentially revisiting an area in L7 with no work programme commitments where oil has been recovered from several wells but with little exploration activity for a number of years”.

The agreement also includes a reimbursement of L7 rehabilitation costs up to an agreed amount of A$1.9m ($1.4m).

Upon completion of the sale, Key Australia will assume operatorship of L7 and all associated liabilities.