On April 5, 2006, Keeper announced that it had signed a Production Sharing Contract ("PSC") with Pogo and PetroVietnam for hydrocarbon exploration and production from Block 124 in the Phu Khanh Basin, offshore Vietnam.
The signing of the PSC gave Keeper a 25% working interest and Pogo 75%. Concurrent with the signing, Keeper entered into an assignment agreement with Pogo in which Keeper's 25% interest was acquired by Pogo in return for a 5% GOR.
The assignment was subject to approval of PetroVietnam and the Government of Vietnam. This assignment has now been approved. Keeper's interest in Block 124 is now a 5% GOR on 100% of the production from Block 124. Terms of the GOR include Keeper paying its proportional share of operating costs from the wellhead to the sales point. Keeper is also responsible for all of its tax obligations within Vietnam.
Block 124 covers approximately 6,007 square kilometers (1.48 million acres) and abuts the eastern coastline of Vietnam, 400 km north of Ho Chi Minh City. The exploratory phase of the contract is seven years, with a firm minimum work program during the first three years that includes the acquisition of 850 square kilometers (209,000 acres) of new 3-D seismic data and the drilling of two exploratory wells. This is followed by two optional two-year periods during which a well must be drilled during each period in order to retain the licensed acreage. The 3-D seismic acquisition was completed in late 2006. Pogo has stated that they plan to drill on Block 124 in 2008.
Keeper Warrants Exercised
Keeper Resources Inc. is also pleased to announce that shareholders of the company have exercised warrants for the purchase of 2,068,500 shares in the capital stock of the company at the price of $1.20 per share. Resulting proceeds to the company total $2,482,200. The warrants were originally issued in June 2005 to investors partaking in a 6.0 million unit private placement offering for proceeds of $5,400,000. In accordance with the terms of issuance, the remaining warrants expired on the 30th day of June 2007.
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