To earn its interest in the leases, South Marsh LLC much reimburse Ridgelake up to 13.33% of certain past costs, and meet up to 13.33% of the cost of drilling to casing election point. In addition, Entek will issue 300,000 options to Ridgelake (or their nominees) to acquire shares in Entek Energy Ltd. The options will be exercisable at 12.9 cents each and will expire on December 30, 2009.
This represents an entry opportunity for the company into an exploration and production area much sought after by prominent energy companies worldwide.
The leases are subject to a 16-2/3% federal royalty and between a 3-1/3% to 4% royalty in favor of certain third parties who generated the properties.
South Marsh LLC has not yet entered into joint operating agreements for these leases (which are to appoint Ridgelake as the operator) which are necessary before South Marsh LLC has an enforceable right to earn an interest in the Leases; and drilling on any of the leases can commence and South Marsh LLC can earn its interest in the leases.
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