R Announcing the extended agreement between the two organizations, Bounty Managing Director Tom Fontaine said the UK company had invited Bounty to be the operator for its Mongolian interests in the event of a commercial discovery.
"Electro Silica recognizes Bounty as an energetic company with a progressive approach to oil and gas exploration and development – as a company that 'gets things done' – and as a result, is expanding our partnership," Mr. Fontaine said.
"The move into Mongolia is especially exciting for Bounty as it continues its growth into the international arena beyond our current commitments in Tanzania and NZ. "The deal free-carries Bounty through the acquisition of the initial seismic and the drilling of one well per each of Electro Silica's four Mongolian licensed block holdings and allocates us five percent of all its local hydrocarbon exploration and development interests.
"Plans are currently being formulated to undertake what will be the first ever regional seismic survey of Mongolia's basins which are as yet totally unexplored.
"Electro Silica has exclusive rights to explore all of the unlicensed open acreage within Mongolia under a Geophysical Study arrangement with the Mongolian authorities. "Initially, this will involve a 2D seismic survey of up to 2,000 kms to be undertaken this year, with drilling to follow. Electro Silica is committed to ultimately acquiring up to 10,000 kilometers of seismic data in the region.
"Regional reserves are unknown because of the lack of modern seismic data, but proven producing basins surrounding Mongolia contain over 17 billion barrels of oil. This seismic survey will confirm whether these plays extend into the unexplored basins.
"Because of the huge energy market of China on its doorstep, any discovery made in the area will be readily commercialized. An initial pipeline between Russia and China is expected to be completed before the end of 2005, with a second pipeline through Mongolia to be constructed by 2010."
Mr. Fontaine said Bounty looked forward to a productive partnership with Electro Silica in this new and unexplored prospective region.
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