This royalty deed, dated 5 September, 2006, covers a royalty paid by Buru Energy on all petroleum recovered from its (as licence holder) three WA permits. The licences are:-
EP129 (8 blocks, expiry 17.03.2021);
L6 (L6 R1 expires May 2027); and
L8 (R1 expires May 2027).
The royalty rate is 3% of Well Head Value, defined as the price that an arm’s length buyer would pay for petroleum at the well head being the same price as accepted by the WA State Government under the State Royalty less the amount calculated as ‘Allowable Deductions’.
|EP or PL #||Date Issued||Expiry||Area (km2)||Held by|
|EP 129||18 March 2016||17 March 2021||652.9955 (8 blocks)||Buru Energy Limited|
|L 6||19 May 2006||18 May 2027||407.9 (5 blocks)||Buru Energy Limited|
|L 8||19 May 2006||18 May 2027||326.3084 (4 blocks)||Buru Energy Limited|
|L 17||10 April 2013||Indefinite as per the terms of the license dated 10 April 2013||81.6 (1 block)||Buru Energy Limited|
The Lennard Shelf Royalty was created by a Royalty Deed dated 5 September 2006 over the entire area covered by EP 129, as well as over Production Licences L6 and L8 and was registered on 2 March 2007. EP 129 was reissued on 18 March 2016 with a new expiry date of 17 March 2021.
Backreef Area of EP 129 and L6
Fitzroy is monitoring the activities on the ‘Backreef Area’ of L6 and EP 129, particularly those of Emperor Energy Ltd (ASX: EMP) formerly Oil Basins Ltd. It is understood that Buru holds 100% of the Backreef Area on trust for Emperor Energy Ltd and other parties due to the completion of the drilling of the East Blina-1 well on 31 October 2012 in accordance with the ‘Backreef Play Agreement’ dated 30 October 2008. As previously announced, Fitzroy had some negotiations with Buru during 2013 regarding the terms of a deed of covenant proposed to be entered into by the beneficial owners of the Backreef Area, to support Fitzroy’s royalty interest. The contractual relationship governing the 3% royalty obligation (which is registered against L6 and EP 129) is between Fitzroy and Buru alone.
In April 2013, a new petroleum production licence L17 was granted to Buru. L17 is over a single block (block 6275, which was formerly part of EP129). L17 constitutes a ‘Replacement Permit’ under the Royalty Deed. In July 2013 Fitzroy applied to register the Lennard Shelf Royalty against L17 and on 19 May 2014 the registration application was approved.