Avenue has a 45% interest in the Karakilise-1 well pursuant to the Farmin and Participation Agreement, as amended between AME and affiliated companies, Middle East Petroleum Services Ltd. and Avenue. Since commencing production in mid-September, the Karakilise-1 well has produced approximately 21,000 barrels of good quality light crude. During the month of December, a total of 3,538 barrels of good quality light crude (32.58 API) were produced at Karakilise-1.
Avenue and AME are currently in discussions with respect to Avenue's participation in expenditure for infrastructure improvements and the drilling of a second well at the Karakilise license which AME currently anticipates commencing during March of 2004.
In order to fully participate in all the activities at the Karakilise license, the other anticipated oil and gas related activities in the Republic of Turkey during the next twelve months and to fund corporate overhead expenditures, the Company will need to seek additional financing through the sale of debt and equity securities. As the Company previously reported, with the full conversion in September 2003 of the $1.3 million convertible note issued under a purchase agreement in April of last year into shares of the Company's restricted common stock, the Company has less than $100,000 of short and long-term indebtedness.
Turkey straddles the oil-rich Middle East and the energy hungry European Union (EU). The South-East Turkey region forms the north flank of the Arabian Basin, and lies adjacent to the major oilfield belt of Iraq, Iran and Syria. Only approximately 1,400 exploration and appraisal wells have been drilled in the whole country since 1961. Turkey's portion of the Arabian Basin has had relatively less exploration with fewer wells per acre drilled than the rest of the prolific oil producing Arabian Basin.
In November 2003, Avenue gave notice of its intention to exercise its options over interests in petroleum licenses and leases which along with the participating interests it currently holds, gives Avenue what it believes to be the largest non-governmentally operated petroleum exploration and production acreage in Turkey.
Over 50% (in area) of these licenses and leases are located between producing oilfields in SE Turkey (including Turkey's largest oilfield -- the Raman Oilfield) and the producing oilfields in northeastern Syria and northwestern Iraq. The remainder of the Licenses are located in central and western Turkey.
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