The financial terms included a cash payment of one hundred thousand dollars US to New Standard NL. PetroSun will be assigned a 70% working interest in the Canning Basin permit as the sole funder of the drilling, testing and completion costs of the initial three test wells. PetroSun will be responsible for seventy percent and New Standard NL thirty percent of the costs on all subsequent wells drilled on the farmin leasehold.
The EP 442 Farmin Agreement contains 22 graticular blocks that total 1,760 square kilometers or approximately 434,720 acres within the permit boundaries. The initial test well will be drilled to a depth sufficient to fully evaluate the Ordovician Acacia Sandstone.
PetroSun has been designated as the Manager/Operator of Exploration Permit 442. The net revenue interest to the working interest owners approximates ninety percent, with the government retaining the balance as a royalty interest.
PetroSun's current oil and gas operations are concentrated in the Ark-La-Tex region with plans to expand into New Mexico, Arizona and Australia in 2007. Algae BioFuels, a wholly owned subsidiary of PetroSun, is an emerging producer of biodiesel derived from the cultivation of algae. PetroSun is headquartered in Phoenix, Arizona with field offices in Shreveport, Louisiana and Opelika, Alabama.
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