Novus and Mitsui acquired their additional working interests from BNP, the Texas-based operator of the project. The BNP-Novus transaction closed on January 29, 2002 and the new working interests in the Padre Island Project are as follows: Novus Petroleum holds 40%; BNP as operator holds 40% and Mitsui Oil Exploration holds the remaining 20%. Golden Gate Resources, a Canadian based company, has an option over a 10% working interest out of BN's 40% working interest.
The Padre Island Project covers an area of approximately 425 square miles. The Project Joint Venture owns a total of 474 square miles of recently acquired nonexclusive, 3D seismic data in the Project Area, as well as seismic options giving it the exclusive right to shoot seismic over that part of the Area not already covered by modern 3D. Based on interpreting the seismic, the Project Joint Venture now owns 132 drilling leases within the Project Area, totaling 62,900 acres, giving it the exclusive right to drill for and produce hydrocarbons. In all but one such drilling lease, Novus now owns a 40% working interest, giving it a net acreage position in the Padre Island area of approximately 25,160 acres.
The one exception is the drilling lease covering the La Playa prospect, which was farmed out prior to the creation of the Padre Island Project Joint Venture. Here the working interests remain unchanged, viz Novus (30%), BNP (Operator, 30%), Mitsui (15%), KCS (15%) and Golden Gate (10%). The La Playa-1 well is currently being drilled in that drilling lease.
Dr Bob Williams, Chief Executive of Novus, and Mr Paul Black, President of BNP, in a joint statement said that they had agreed the deal in order to create a financially robust joint venture with simple land title ownership in order to avoid possible future issues of split titles, pooling, unitization, etc. "We are very pleased with the excellent working relationships we have created within the Padre Island Joint Venture," they said, "where all parties are contributing their technical, commercial and financial skills to the benefit of the Project. We look forward to a long relationship as the Padre Island acreage is explored and developed, and we are hopeful that our Project Area will emerge as a major gas-producing area of South Texas".
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