Key strikes Canning deal with Empire
From Kenya to Romania and now to WA's Kimberley region.
Key Petroleum has struck a deal to acquire a portfolio of permits in the Canning Basin, which is gaining attention following big-ticket farm-in deals by ConocoPhillips and Mitsubishi Corp, from Perth junior Empire Oil & Gas.
In return, Empire will emerge with a 19 per cent stake in tiddler Key and the chairmanship, which will be filled by Empire managing director Craig Marshall, as well as a stake in a Perth Basin permit. The deal is subject to Key shareholder approval late next month.
Key shares jumped 0.5¢ to 1.7¢.
Shares in Empire, which is focusing on developing two small gasfields in the Perth Basin, closed unchanged at 2.4¢.
The deal marks the latest change of direction for Key, which only a few years ago was trumpeting the potential of a gas find in Tanzania, only to be thwarted by planning hold-ups. A subsequent plan to move into Romania through the acquisition of Zeta Petroleum collapsed three weeks ago because of disagreement over terms with the vendors and proposed farm-in partner Cooper Energy.
Key chairman Dennis Wilkins said the Canning Basin move would "breathe fresh life into the company and provide immediate focus and activity in one of Australia's emerging hydrocarbon provinces".
New Standard Energy, which has signed up ConocoPhillips to help fund its Canning Basin exploration campaign, is in a trading halt at 36¢ while it finalises a capital raising.
