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ASF Group Associate Rey Resources Ups Interest In Canning Superbasin

ASF Group (ASX: AFA) assocaite company Rey Resources (ASX: REY) has acquired an additional 15% stake in two Petroleum Exploration Permits in the Canning Superbasin, Western Australia, from Buru Energy (ASX: BRU) for $6 million.

ASF, a fairly unique ASX-listed company that acts as a creator and facilitator of two-way cross-border investments, trade and technology transfers between China and Australia, owns 22.7% of Rey.

Rey's acquisition increases its interests in EP457 and EP458 to 25%, giving ita meaningful position in the highly prospective Canning Superbasin that will create additional value for its shareholders in the near to medium term.

Notably, Buru is an experienced operator that has being tremendously successful in carrying out exploration in the region, having made the Ungani oil discovery that is currently undergoing extended production testing and made the Laurel gas find that has potential to be a giant discovery.

Rey will fund the acquisition and its share of the 2013 work program from its current cash holding of $8.5 million plus another $3 million that it expects to raise from a proposed equity placement with Hong Kong-based investment company Crystal Yield Investments Limited.

Crystal Yield will subscribe for 55 million Rey shares priced at $0.055 each, giving it about 9.7% of Rey's issued securities.

Canning SuperBasin

EP457 and EP458 - the Fitzroy Blocks, cover parts of the Ungani oil trend, the Laurel tight gas formation and the Goldwyer Shale.

Operator Buru is currently reviewing the geology and prospectivity of the Fitzroy Blocks with a view to undertaking an on-ground exploration program.

This is likely to include additional seismic programs over some of the attractive prospects already identified, with a view to drilling exploration wells on the Ungani trend and the other highly prospective areas in the permits as soon as possible.

Exploration carried out by Buru has identified an immediate area of prospectivity that extends across the Fitzroy Blocks with a regional review defining Mean risked Potential Prospective Resources for the greater Ungani exploration area of more than 300 million barrels of oil across 20 leads and prospects.

The Laurel Formation has the characteristics of a Basin Centred Gas Accumulation and may host 9 trillion cubic feet of gas and 260 million barrels of condensate in the Valhalla discovery area within Buru's acreage.

Rey's existing 10% interest is free-carried until the grant of a petroleum production licence. Following completion of the transaction, Rey will be required to contribute 16.7% of the forward capital expenditure to production.


While still early days, the transaction provides Rey and hence ASF Group with a greater holding and exposure to the oil and gas sector as Rey transitions into a diversified energy company.

Of especial note, EP 457 is adjacent to Buru's Ungani oil discovery that is now undergoing extended production testing and could contain an extension of the trend, making it highly prospective for oil.

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