Bordeaux expects that the first exploratory well on the Leases will be drilled on or about mid-March 2008. The Exploratory Well will test a prospect identified by Savant on a large 3-D seismic survey that was acquired by BP in 1993 and 1995 and held by Savant under a prior license agreement between Savant and BP.
Under the Participation Agreement, the Company has the right to earn an undivided 30% working interest in the Leases by paying (a) 30% of the land and data costs (approximately US$1,200,000), and (b) 40% of the costs and expenses of the Exploratory Well up to a maximum cost of US$7,000,000, net to Bordeaux after which Bordeaux will pay its proportionate 30% share of any additional costs. Upon completion of the Exploratory Well, the Company will have earned an undivided 30% working interest in the Leases and each of the parties must pay its participating interest share of the future costs and expenses relating to the Leases.
Closing of the transaction is anticipated to occur on or around December 15th, 2007 and is conditional upon the receipt of all necessary regulatory and stock exchange approvals.
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