The permits cover exploration licenses in the Antalya region in Turkey (the "Additional Licenses"). Avenue will acquire up to a 50% participating interest in the Additional Licenses subject to a 7.5% overriding royalty interest (excluding governmental royalties) in favor of Ersan Petrol Sanayii A.S., an affiliate of the Sayer Group. These Additional Licenses are in addition to the 24 leases announced by the Company on February 2, 2004 for drilling and production operations at the Karakilise license and at other exploration and production licenses and leases in Turkey.
As previously reported by the Company, Avenue originally exercised the option over the Additional Licenses in November 2003 and recently completed that transaction by making the requisite payments to AME.
Commenting on the latest developments, Avenue's Director of Exploration, Dr. Jaap Poll said, "Avenue's acquisition of these three new Licenses gives it an additional solid acreage position in some of the most productive basins in Turkey, which include as well, part of the Arabian basin. The total Arabian basin structure contains about 65% of the world's known oil reserves. In addition, Avenue also has the right until May 2006, to acquire up to a 50% interest in any future applications for oil and gas exploration licenses which may be made by the Sayer Group in Turkey."
The three new licenses are located in Petroleum District XVI, in Antalya, Turkey which forms part of the Antalya Basin in the eastern Mediterranean, with the Bulgurdag Oil Field being the nearest in the adjacent Adana Basin.
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. The Turkish portion of the Arabian Basin is less explored with fewer wells per acre drilled than in the rest of the Arabian Basin.
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