Ann: EP437 Perth Basin Farmout , page-6

KEYS strategy is unfolding in a very clear and deliberate way. That is drilling low cost, shallow wells well researched looking for oil. In order to achieve this they have positioned themselves as having majority ownership and therefore operatorship in all their tenements.

They have raised money in very difficult market conditions and are one of the only genuine small explorers willing to have a go. They are getting others to pay for the wells while holding a meaningful percentage of the play.

Gas takes to long to develop with a huge number of pitfalls along the way, offshore is too costly and too long to develop.

Obviously it is high risk strategy but it is being prudently applied but the more holes that they do the higher the chance of success and they do it on a shoestring budget. If EP448 can be farmed out and another 2 wells drilled that would give KEY 4 wells including cyrene that they will have drilled without risking all their capital.
Interestingly they have elected to drill the Dunnart-2,maybe because the data from Dunnart-I drilled 2011 is providing better confidence as Key participated in the well even though as a quarterly reported on Wye-1 just 10 km away,
"The prospectivity of the Permit is also confirmed by the Wye-1 well drilled to 766 metres in 1996. Oil shows while drilling Wye were recorded in virtually every porous sandstone from the top of the Jurassic aged Champion Bay Group (Cadda Formation) to the Permian aged Wagina Sandstones. Gas shows were noted in the Arranoo Sands and the basal sands of the Triassic aged Kockatea Shale.
Wye-1 flowed 4.4 million cubic feet of gas per day (4.4 MMCFGD) from the Permian aged Wagina Sandstone on test with
H2S in the gas stream. The H2S was postulated to be from an oil leg, possibly biodegraded, downdip at the Wye Knot
Prospect. A further test conducted within the Arranoo Sandstone had a calculated gas flow rate of 1.7 MMCFGD. The goodoil shows in Wye-1 support a possible down dip oil leg. The hydrocarbon potential of the Wye and Wye Knot area and the Dunnart-1 well will be evaluated as part of a Permit review by Key. This is being undertaken to develop prospects and leads identified in the EP 437 Permit, considered highly prospective, particularly for oil"

If oil is discovered then Key price can be multiples of its current and still stands in a good position if it is a duster and very few junior oil or mining companies can say that.