This approval represents a required statutory step towards the signing of Global's first contract in Peru. The company anticipates that the contract will be signed by Global and Perupetro and subsequently become effective by the end of the first quarter of 2005.
The approval follows a 2001 Technical Evaluation Agreement which Global entered into with Perupetro. Global conducted an extensive study of the Block 95 Area that included the reprocessing of seismic data and evaluation of previous well data.
The Bretana field, located in the Block 95 Area, was identified in the early 1970s. In 1974 the Bretana # 1 well tested 18 degree API gravity oil at rates of approximately 800 barrels of oil per day.
It is anticipated that when signed, the contract will assign Global exclusive exploration and production rights to approximately 1,255,000 acres and that Global will own a 100% working interest in the contract subject only to an initial 5% royalty. The size of the royalty is to be determined by future production levels. The contract duration is currently set at approximately seven years for the initial exploration phases and 23 years for the exploitation phase.
Commenting on the forthcoming Peruvian contract, Stephen C. Voss, Managing Director for Global Energy Development PLC, said, "We are delighted to announce this significant step towards signing our first exploration and exploitation contract in the country of Peru. Block 95 is a portion of the original Area III that the company evaluated over the last three years under the TEA, and identified a number of opportunities including the Bretana oilfield. We believe the Bretana oilfield is a development drilling opportunity, based on data provided by independent engineers. In addition, the company considers the remaining contract acreage to offer exploration opportunities. Global looks forward to completing the signing procedure and commencing operations on this exciting area."
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