According to the letter of intent, Ignis will participate in the drilling of the initial test well sufficient to test various shallow Miocene Sands as well as the deeper Oligocene Cibicides Hazzardi Sands. In exchange for Ignis paying twenty-five percent (25%) of the test well costs and lease bonus, rental and geological and geophysical costs already expended, Ignis will receive a twenty-five percent (25%) working interest in the test well before payout of the test well and a twenty percent (20%) working interest after payout of the test well or as of the commencement of drilling of any subsequent well on the leases.
Ignis plans to enter into a mutually acceptable Participation Agreement and Operating Agreement, naming the partner as Operator, before the end of the year. Drilling of the test well is expected to begin before the end of the first quarter 2006.
Commenting on LOI, Michael Piazza, President and CEO of Ignis, said, "We are excited to participate in this high-potential prospect. The nature of this opportunity, namely multiple objectives defined by subsurface control and 3-D seismic, makes the prospect an ideal fit to our portfolio of drillable prospects."
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