A 20% interest can be earned by the Farmee upon the conclusion of a Phase I work program wherein the Farmee must conclude a high resolution 100 kilometer 2D seismic program and drill one well in the Bualuang Field. At the election of Farmee, a further 40% working interest can be earned in the Phase II work program. The Phase II work program, during which SOCO Thai would fund only 8% of the cost, requires the Farmee to drill up to eight wells, install a platform and take the project to first oil.
After the end of the Phase II Period, GFI shall be designated the operator of the project and shall engage an independent reservoir engineer to perform an analysis of the proven reserves contained in the Bualuang Field. The Farmee shall pay SOCO Thai an amount equal to one dollar (US$ 1.00) for each barrel over ten million four hundred thousand (10,400,000) barrels.
The assignment of interests in the Agreement is subject to approval of the appropriate regulatory authorities of the Government of Thailand.
Ed Story, chief executive of SOCO, commented, "This is a transaction that benefits all the parties involved. It allows SOCO to focus resources on higher profile projects in Vietnam and Yemen, but can accelerate the development of our Thailand project and provide meaningful production as early as the end of 2007."
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