MEC Resources has advised that, further to announcements on 5 December 2017 and 19 February 2018, a conditional farmin agreement to Petroleum Exploration Permit 11 ('PEP11') has been signed by Asset Energy and RL Energy.

Asset Energy is a wholly owned subsidiary of MEC investee Advent Energy, and presently holds 85% of PEP11 and is Operator of that title.

The conditional agreement between Asset Energy and RL Energy provides for RL Energy to acquire 3D seismic data to meet the future 500km² PEP11 permit work commitment (inclusive of acquisition, processing and interpretation), by carrying Asset Energy’s participating interest share of these costs up to a capped amount of $4 million. PEP11 Joint Venture partner Bounty Oil and Gas (holding 15% of PEP 11) has indicated its support for the farmin agreement and for it to be to the benefit of the Joint Venture and the progressive exploration of PEP11.

The agreement replaces the binding term sheet previously in place between the parties. Key terms of the agreement include, but are not limited to:

• RL Energy having the right to earn a 5% interest in PEP11 by preparing and submitting all documents and reports in support of an environmental approval process for the proposed 3D seismic program. The costs associated with the preparation of the environment plan documents and reports are to be met by RL Energy, and will not count towards the capped expenditure amount referred to above.
• RL Energy having the right to earn a further 55% interest in PEP11 upon the acquisition, processing and interpretation of a 500km² (or greater) 3D seismic survey in PEP11 to cover key structural targets. The 3D seismic works will be subject to the availability of a suitable seismic vessel.

Conditions precedent to the agreement include, but are not limited to:

• Regulatory approval of the agreement.
• Asset Energy confirming that its ultimate parent entity (MEC) has sought and received shareholder approval to the transaction – as previously announced on 19 February 2018. The ASX has used their discretion to determine that RL Energy is a person to whom Listing Rule 10.1 will apply. Accordingly, the Company is required to now comply with Listing Rules 10.7 and 10.10. The Company will seek shareholder approval and an independent expert report will be included in the notice of meeting to be provided to shareholders, at the earliest opportunity.