In Syria, the Syrian parliament has ratified the Production Sharing Contract ("PSC") between the Government of Syria, Stratic and the Kuwait Foreign Petroleum Exploration Company ("KUFPEC") for Block 17, with an effective date of 8th December 2005 for the commencement of the initial 3 1/2 year exploration term of the Contract.
Block 17 encompasses 5,076 square kilometers (1.254 million acres) and includes the southern portion of the prospective Palmyride Fold belt, south of the prolific Palmyra, Cheriffe and Abu Rabah gas fields, where a number of large unexplored structures have been identified on existing seismic data. Under the terms of the PSC, the Contract owners have committed to spend US$5.2 million in the initial 3 1/2 year exploration term with a work program comprising the acquisition of 625 line kilometers of new 2D seismic data and the drilling of one exploratory well. Two optional extension periods of four and three years respectively are contemplated under the terms of the PSC, each period containing work commitments for additional seismic and drilling.
Stratic has entered into an agreement with Dual Exploration Inc. ("Dual") whereby, subject to the approval of the Syrian authorities, Stratic will assign to Dual a 31.67% participating interest in the PSC. Stratic will retain a 35% working interest and operatorship, with KUFPEC continuing to hold a 33.33% interest in the PSC.
Dual is a Canadian junior oil and gas company with production operations in Alberta and also internationally in the Lusitanian Basin, Portugal. The company is headquartered in Calgary and trades on the Toronto Stock Exchange. Dual was created in July 2005 as a result of an arrangement between Devlan Exploration Inc. and Cyries Energy Inc.
Tom Mackay, Senior VP, Technical commented "We are pleased to receive formal notification of the award of this very prospective acreage in Syria, and look forward to commencing work on the seismic acquisition program in preparation for drilling in 2007. We have been working with Dual on this acreage since early this year and we are delighted to announce their participation, subject to approval of the Syrian authorities, as our partner in Syria."
In Turkey, Stratic announces the successful results of the Ayazli-2A development well in the South Akcakoca sub-basin in the Black Sea. The results of the well, which was drilled some 80 meters distant from, and as a replacement to, a previously damaged well, are wholly consistent with those of the earlier well and provide confirmation of our understanding of the discovery. The new well, which will be used as a production well, has been suspended temporarily pending installation of production facilities in 2006. The new well will contribute to initial gas production in the second half of 2006.
The existing jack-up rig ("Prometheus") will immediately commence drilling the next development well on the Ayazli discovery. A second jack-up rig ("Saturn"), which has recently been contracted by the partners, has been mobilized and is expected to commence further development drilling on the nearby Akkaya discovery within the next 10 days.
The partners have also agreed to contract a semi-submersible rig ("Southern Cross"), to drill up to three exploration and appraisal wells in the slightly deeper water Akcakoca prospect trend commencing April, 2006.
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