Frontier Resources International Plc provided Tuesday an update on operations at its 100 percent-owned Block 38, which covers a surface area of approximately 6,727 square miles (17,425 square kilometers) in the Rub Al Khali Basin in the southwest of the Sultanate of Oman. A six year Exploration and Production Sharing Agreement (EPSA), comprising two three-year phases, was signed Nov. 25, 2012. Frontier is the operator. In April, the Company announced that it had received approval to exchange the Phase 1 work commitment of a 3D seismic survey for an exploration well with a 2D seismic survey and that it would start discussions with the tender board to begin the process to select suitable contractors to complete this work program.
Subsequent to this recent agreed change in the work program, Frontier has entered into preliminary discussions with Middle East-based entities regarding a potential farm-in to Block 38. The Company anticipates that any formal farm-in agreement would include a carried interest for Frontier through the initial drilling program and the repayment to Frontier of a proportion of its sunk costs to date (which currently amount in total to $1.6 million). Completion of any farm-out would be subject to formal documentation and due diligence and in respect of a transfer by Frontier of the operatorship of Block 38, would also be conditional on Oman regulatory approval.
As previously reported, during the past two years, Frontier has completed the re-processing of some of the existing 2D seismic data on the Block and has identified two potential structural leads not identified by previous operators. The few historic wells drilled in this very large block did not penetrate any of the geologic formations considered to comprise each of the new independent leads.
A further announcement will be made in due course.
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