BAAR, Switzerland, December 12 /PRNewswire/ -- DWM Petroleum AG (100% subsidiary of Manas) (DWM) & Santos International Ventures Pty Ltd. (Santos) have entered into an Option Agreement under which Santos has a unilateral option to elect for the those parties to execute at a later stage, a Farm In Agreement for a 70% interest in DWM's Novobod Tajikistan License and a proposed North Tajik licence. Manas expects the North Tajik Licence to be granted to Somon in the near future.
DWM has a 90% equity interest in Somon with the other 10% interest held by the local Tajik company Anawak LLC. Under the Option Agreement Santos will pay an amount equivalent to the seismic acquisition costs in the Tajik area (approximately USD1.3 million) in consideration for a call option to farmin to Somon's prospecting licences. The Option may be exercised by Santos any time during the option period. The option period commences on the date of the option agreement and expires after 6 months unless extended due to certain conditions not being met.
In connection with the option agreement, DWM subsidiary Somon has entered into a seismic agreement with Saratovneftegeofizika (SNG) under which SNG is to carry out approximately 110 km of 2d seismic acquisition in Tajikistan (Seismic Agreement). The Seismic Agreement underlies the option agreement and is designed to meet a condition set by the Tajik authorities, whereby once work has commenced in the Novobod licence, an additional licence area, the North Tajik license, may be granted to Somon Oil.
In the event that Santos elects to exercise its option, Somon, DWM and Santos will execute the Farmin Agreement under which future funding obligations are set out over three phases. Santos obligations will include costs associated with the acquisition of additional 2d seismic (Phase 1), the drilling of a number of exploration wells (Phase 2) and further appraisal drilling (Phase 3). Santos may elect to withdraw at the completion of Phase 2.
Because of commercial reasons, the parties have agreed not to disclose the total funding obligations until a later stage.
A South Petroleum Company (SPC) operated seismic program is currently underway on the South Tuzluk Petroleum Licence in Kyrgyzstan (SPC is 70% owned by Santos, 25% DWM and 5% Kyrgyzneftegaz) and as a consequence of the completion of the Option Agreement, this survey will be extended into DWM's Tajik Novobod license area, with Tajik data acquisition expected to commence within the next month.
The Novobod license is located in the Fergana Basin directly north of the South Tuzluk license. SPC is currently shooting seismic for better definition of sub-thrust leads previously defined by Soviet 2D seismic within the South Tuzluk license. The Novobod licence shares the same geology as the Tuzluk license in Kyrgyzstan. An existing oil and gas field extends across the border from the Tuzluk license into the Novobod licence area and a number of leads may also straddle the adjoining licence areas.
The United States Department of Energy estimates 3 billion barrels of recoverable oil remained still undiscovered in the Fergana Basin.
This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company has tried, whenever possible, to identify these forward-looking statements using words such as "anticipates", "believes", "estimates", "expects", "plans", "intends", "potential" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. The Company undertakes no obligation to update or advise in the event of any change, addition or alteration to the information catered in this Press Release including such forward looking statements.
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