Announcing the farm-in agreement, Global Chairman John Armstrong said that RWE Dea is a welcome party in the joint venture. "This farm-in is very good news for Global shareholders," he said. "RWE Dea is an international oil and gas producer and explorer and is part of the RWE Group, one of Europe's largest companies. It is active in exploration and production as operator and non-operating partner in Germany, the U.K., Norway, Denmark, Egypt, Dubai, and Kazakhstan, and holds exploration licenses in Algeria, Libya, and Poland. In 2005, RWE Dea's oil and gas production was approximately 120,000 boe per day,"
Under the farm-in agreement, RWE Dea earns a 20% interest in the exploration study agreement for Global's Malta Blocks 4 and 5 of Area 3, with Global retaining 80%. RWE Dea plans to undertake seismic studies in the 2nd half of 2006 in the blocks at RWE Dea's cost.
RWE Dea and Global have the option, to be exercised during the term of the exploration study agreement, to enter into a production sharing contract. The minimum work commitment during the first 2-year exploration period under this contract is the drilling of one well. By carrying Global's share of the cost of that well on a dry-hole basis, RWE Dea will earn an additional 50% in the venture with Global retaining 30% (including a 3% interest on behalf of Envoi Limited, the U.K. marketing agency that assisted Global in the farm-in process).
Armstrong said that the Malta blocks are located in the southern region of the Ragusa Trough, which contains the Vega oil field in the Italian part of the basin and that extends south from Sicily in the Mediterranean Sea. The blocks contain several leads that will be the principal focus of the planned seismic program with RWE Dea.
The Government of Malta has extended the exploration study agreement for a further 6 months until Dec. 31, 2006, allowing the planned seismic work program that will be operated by RWE Dea to proceed,
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