Avenue Energy Increases Interest in Turkish Well
Avenue Energy has exercised its initial option in connection with its participation in the Tosun -1 well and License located in the Republic of Turkey. Avenue has entered into an Agreement with the Sayer Group Consortium and Middle East Petroleum Services Limited to acquire up to a 45% participation in certain oil and gas rights and properties located in Turkey. Avenue made its next payment of US $1.25 million to participate and acquire up to a 45% interest in the Tosun-1 well and License.
Tosun-1, which lies immediately adjacent to the producing Cendere and Karakus oilfields in Southeast Turkey, commenced drilling on November 6, 2002. Drilling operations, which were temporarily suspended for Ramadan, have recommenced and are expected to continue over the next 60 to 90 days. Under the terms of the agreement, and in addition to the second payment of US$1.25 million made, Avenue has committed to making a further payment of US $500,000 on or before February 10, 2003, which will lift Avenue's equity in the Tosun well and License to 35%. Avenue has the option, exercisable by February 10, to make a final payment of a further US $500,000, payable 5 business days after the Tosun-1 well has reached total depth, which would complete its turnkey cost of US$2.5 million for a 45% interest in the Tosun-1 well and License and maintain its options with respect to certain other licenses under the Agreement. In the event of a discovery, Avenue's contribution towards electric logging, running a production string, testing and completion costs is capped at US $250,000.