On January 20, 2004, there is expected to be an official signing in New Delhi, India of all of the NELP-IV Production Sharing Contracts ("PSC") awarded. At the signing the Company, through its wholly-owned subsidiary, GeoGlobal Resources (Barbados) Inc., along with its joint venture partners, will enter into two new Production Sharing Contracts with the Government of India covering the new onshore Exploration Blocks CB-ONN-2002/2 and CB-ONN-2002/3.
The Production Sharing Contracts expected to be entered into will each provide for work commitments to be performed over three phases over a period of a total of six years with specified 3D seismic and exploration drilling activities to be conducted during those work commitment periods. The Company will be required to fund its proportionate share of the costs incurred in these activities estimated to be approximately US$2.5 million over the six years.
CB-ONN-2002/2, also referred to as Blocks 9A and 9B under NELP-IV, covers an area of approximately 125 square kilometers (sq. km) on shore in the Cambay Basin. GeoGlobal holds a 10% participating interest ("PI"), Gujarat State Petroleum Corporation Limited ("GSPC") holds a 60% PI, and Jubilant Enpro Limited, ("Enpro") who is the operator, holds the remaining 30% PI.
The work commitment is to acquire 75 sq. km of 3D seismic and drill a total of 11 exploration wells to various depths between 1000 and 2200 meters.
CB-ONN-2002/3, which is also referred to as Blocks 10A and 10B under NELP-IV, covers an area of approximately 285 sq. km. onshore in the Cambay Basin. GeoGlobal holds a 10% PI. GSPC is the operator and holds a 55% PI, with the remainder held by Enpro and Prize Petroleum Company Limited.
The work commitment is to acquire 120 sq. km of 3D seismic and drill a total of 17 exploration wells to various depths between 1500 and 3000 meters.
Mr. Jean P. Roy, President and CEO of the Company, stated "...The recent award of two exploration blocks in which we will hold an interest will bring a significant increase in drilling activity for the Company with participation in lower risk, onshore, exploration drilling activities.. The Cambay Basin already contains a number of proven producing petroleum and natural gas fields and the Company Blocks are located adjacent to recent discoveries by GSPC. "
With respect to the status of the KG-OSN-2001/3 Exploration Block ("KG Block") in which the Company holds an interest, preliminary mapping has been completed on the newly acquired 1298 sq. km of marine 3D seismic survey program conducted in the first half of 2003. While processing and interpretation of the data is continuing, a number of prospects have been identified and mapped. The KG drilling strategy is being formulated and a number of sea bed cores have already been drilled for the intended positioning of the jack-up drilling rig. The multi-well drilling program is on target and is expected to commence near the end of the first quarter of 2004.
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