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Pancontinental Oil & Gas Nl Farmin to Large Cooper Basin Oil & Gas Trend

07/14/2019 | 06:32pm
Pancontinental Oil and Gas NL announced that it has executed a binding terms sheet to farmin to two large exploration permits, ATPs 920 and 924 in the Cooper Basin, covering 4,557km2. The project areas include the multi prospect, Meeba Project which includes the Ace oil prospect area within ATP 924. The farmin is with Key Petroleum Cooper Basin Pty Ltd. Pancon has agreed to farmin to ATP 920 and the Ace Area component of ATP 924. Pancon will acquire from Key: an undivided 20% participating interest in ATP 920 (together with an option to acquire an additional undivided 15% participating interest in ATP 920); and an undivided 25% participating interest in the Ace Area (collectively the "Farmin Interest"). In consideration of the assignment of the Farmin Interest, Pancon will undertake the following obligations (collectively Farmin Obligations): pay to Key within 3 working days of execution of the terms sheet, $150,000 of which $100,000 is refundable in the event ATP 920 and 924 are not renewed. These are to cover costs in relation to seismic reprocessing in respect of the Ace Area and the area of ATP 920 as well as other permitting costs; and fund 26.67% of the total costs and expenses of drilling an exploration well to target depth including plugging and abandoning the well (Dry Hole Costs) but excluding success case costs associated with testing and completing the well, with such well costs to be capped at gross $3,000,000. By satisfying the Farmin Obligations Pancon shall be deemed to have also acquired from Key an option to acquire a further undivided 15% participating interest in ATP 920: The option may be exercised by Pancon giving notice to Key at least 90 days prior to the expiry of Year 1 of the renewed term of ATP 920. If Pancon exercises the option then Pancon will fund, at its sole risk and expense, during Year 2 of the renewed term of ATP 920, 280km of 2D seismic data acquisition in respect of ATP 920. Key will remain Operator and as soon as practicable following Pancon satisfying the Farmin Obligations, Key will have the option to divide ATP 924 into 2 authorities to prospect, one comprising the Ace Area where Key will retain 75% and the other comprising the balance area within ATP 924 where Key will have 100%. The Excise Option may be exercised by Key giving notice to Pancon within 12 calendar months following Pancon satisfying the Farmin Obligations.
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