Block 124 covers approximately 6,007 square kilometers (1.48 million acres) and abuts the eastern coastline of Vietnam, 400 kilometers north of Ho Chi Minh City. The exploratory phase of the contract is seven years. In includes a firm minimum work program during the first three years that includes the acquisition of 850 square kilometers (209,000 acres) of new 3-D seismic data and the drilling of two exploratory wells. This is followed by two optional two-year periods during which a well must be drilled during each period in order to retain the license acreage.
According to Keeper, the 3-D seismic acquisition should begin in the third quarter of this year. Pogo will serve as operator of the block. PetroVietnam reserves the right to participate in any declared commercial oil and gas discovery by taking up to a 20-percent working interest.
With the signing of the PSC, Keeper will have an initial 25-percent working interest and Pogo will hold 75 percent. Concurrently, Keeper has entered into an assignment agreement with Pogo under which Keeper's 25-percent interest will be acquired by Pogo in return for a 5-percent gross overriding royalty (GOR).
The assignment agreement is subject to the approval of PetroVietnam and the Government of Vietnam. Terms of the GOR include Keeper paying its proportional share of operating costs from the wellhead to the sales point. Keeper is also responsible for all of its tax obligations within Vietnam.
"With the addition of this offshore exploration block to Keeper's existing coal bed methane project in Vietnam, the company continues to capitalize upon the tremendous growth opportunities within Vietnam's resource sector," said Loren Komperdo, Keeper's president and CEO.
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