Under the terms of the agreement, Monte Oro will acquire a 30% participating interest in GSEC101. Monte Oro will pay Forum Energy plc the amount of US$1,500,000 of past costs to the date of the agreement plus its pro-rata share of costs incurred to the point of payment. Payment will take place the earlier of six months following award of the Service Contract or completion of any future farm out transaction.
The participation of Monte Oro in the Service Contract application of Forum, now pending with the Department of Energy (DOE), will entitle the joint venture to the Filipino Participation Incentive Allowance (FPIA) which equates to 7.5% of gross proceeds from any future production. Monte Oro will assist in obtaining all regulatory approvals for the conversion of GSEC 101 into a Service Contract.
The assignment of the interest is subject to the approval of the Department of Energy of the Republic of the Philippines.
Statement from Russell Harvey, Chief Executive:
"We are very pleased to have signed this Agreement with Monte Oro which we are confident will assist us in a timely conversion of the Service Contract. This partner brings a wealth of local experience, which will assist in developing Forumís business while providing welcome Philippine participation in a major local resource. The new Joint Venture will also qualify for the Filipino Participation Incentive Allowance, which enhances the attractiveness of any future development. I am looking forward to working closely with our new partner to expedite both the Service Contract award and activity on the block going-forward."
GSEC101 (Reed Bank) is located offshore Philippines and contains the Sampaguita Gas Field as well as several other oil and gas leads.
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