The concession covers an area of over 269 square kilometers and is for a period of 8 years with the right of automatic conversion to a minimum (but extendable) 25 year exploitation period upon the discovery of commercially exploitable hydrocarbons. Under the terms of the agreement the percentage interest in the permit is COML 75% and ONHYM 25%. COML has agreed to carry out a 3D seismic survey to fully assess and rank the many prospects already identified in the area before commencing a 6 well drilling program in 2007. This equates to the minimum work program for the first 3 years of the permit.
Commenting on the agreement David Hough, Chief Executive of Circle Oil, said:
"This agreement is significant as it provides Circle with a low risk concession with the potential for low cost, fast track development and production. There is an existing local market with good demand for gas and an established pipeline network through the permit area. Success here will provide a long term continuing earnings contribution to the Company."
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