In brief, VAEI has committed to remit a prospect fee in the sum of USD225,000 to acquire approximately 1,550 net acres in Tennessee, and has agreed to conduct pre-drilling exploration works during the first half of 2007, and subject to satisfactory seismic results, to drill an exploration well during the second half of 2007; thereby earning a net revenue interest ("NRI") of 80%. However, if the vendor exercises its back-in option to participate in the prospect, the vendor shall reimburse VAEI for 20% of the relevant capital expenditure, and retain 16% NRI (thus 64% NRI to VAEI).
Similarly, in the case of the Wyoming acreage, VAEI has committed to remit a prospect fee in the sum of USD1,275,000 in order to acquire approximately 8,050 net acres, accompanied by obligations to carry out pre-drilling exploration works during 2007 and, subject to satisfactory seismic results, to drill one exploration well during 2008; thereby earning an 80% NRI (or 64% NRI if back-in option to participate in the prospect, is exercised by the vendor).
VAEI believes its Tennessee venture to be a gas and oil play, whereas its Wyoming project is purely an oil play.
Joseph Naemi, Managing Director of Volant, and Chairman of VAEI, stated that, "our entry into the US oil and gas industry is the result of nearly seventeen months of effort and persistence, and I believe that the high quality of these two ventures in the US, strategically complements Volant's assets in Egypt."
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