RIG CONTRACT BACKREEF-1Oil Basins Limited (OBL, ASX codes OBL,...

RIG CONTRACT BACKREEF-1
Oil Basins Limited (OBL, ASX codes OBL, OBLOA or the Company) wishes to make the following ASX Announcement, so as to keep the market fully informed.
Further to the Non-Renounceable Rights Issue Offer (Prospectus) fully underwritten by Patersons Securities Limited to raise circa $5.262 million before costs and dated 17 August 2010, which is due to close on 13 September 2010, the Company is pleased to advise the ASX that on Friday 3 September, 2010 the Company, as Designated Operator, Backreef Area (Figure 1) has significantly advanced its preparations for the proposed drilling operations, whereby:
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The Company has conditionally committed to the Drilling of Backreef-1 to 1,600m (OBL earning 90% by funding 100% of all costs) conditional upon the Rights Issue raising $5.262 million.
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Entered into a Letter of Intent to Contract a Petroleum Drilling Rig for the drilling of Backreef-1, subject to the Rights Issue raising $5.262 million and the Drilling Rig being cleared for use in WA by the WA Department of Mines and Petroleum (DMP); and
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Formally lodged an Application for Approval to Drill Backreef-1 (and supporting information) with the WA Department of Mines and Petroleum and stakeholders.
The timing and application of funds for this exploration well is consistent with the information in the Prospectus
Costs the gross dry hole cost of drilling the Backreef-1 exploration well is estimated at circa $1.9 million, the gross successful well cost is estimated at circa $2.6 million (assuming a possible contingent deepening).
Drilling Rig The Backreef-1 exploration well will be drilled by Hunt Energy & Minerals Co. Rig 3 (refer to Figure 2) which is rated to drill to 2,300m. The rig is presently in service in the Amadeus Basin, Central Australia.
Time & Spud Date the drilling time is estimated at around 14 days to drill, evaluate and complete and subject to all relevant stakeholder approvals, Backreef-1 will spud in early October 2010.