Under the terms of the farm-in and joint operating agreements, BG acquires a 30% working interest in Canadian Superior's "Intrepid" Block 5(c) Production Sharing Contract; the agreement is subject to Government approval.
Also, under the terms of the agreement with Canadian Superior, BG will be paying Canadian Superior approximately US$ 39 million and on a go forward basis paying 40% of the exploration costs associated with the drilling of the three commitment wells required on Block 5(c).
Challenger has also entered into the joint operating agreement with Canadian Superior and BG. Challenger is paying 33.33% of the costs of the three well exploration program to earn a 25% interest in Canadian Superior's "Intrepid" Block 5(c).
Greg Noval, Canadian Superior's Chairman, said today," We are very pleased to announce that a company of BG's stature has joined us in the exploration drilling and development of Block 5(c). With the funding provided by BG and Canadian Superior's other partner Challenger Energy Corp., Canadian Superior will be paying only 26.67% of the costs of the three well exploration program and will retain a 45% interest in Block 5(c); with BG acquiring a 30% interest and Challenger acquiring a 25% interest in the "Intrepid" Block. BG Group is an established major gas producer world-wide and in Trinidad and brings a wealth of knowledge, experience and liquefied natural gas ("LNG") marketing strengths to this joint venture. The "Intrepid" Block 5(c) has multi-TCF potential and is located in one of the most coveted oil and gas plays in the world. It has been a pleasure putting this transaction together with BG and we look forward to working together on this exciting project."
Canadian Superior is currently operating the drilling of the joint venture's first well, on the "Victory" prospect, on its "Intrepid" Block 5(c). As of today's date, the "Victory" well has been successfully drilled to a depth of 9,772 feet (sub-sea); and currently various drilling operations are being undertaken that will include wireline logging and the running and cementing of 13-5/8" casing, prior to drilling ahead and preparing to evaluate the main targets of the well.
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