Loon originally announced its award of the exclusive right to negotiate a PSC covering Block 9 on June 1, 2006 and the recent ratification was the culmination of a lengthy process of negotiation that followed the original award. As part of the signing process, Loon has posted a bank guarantee of US$7.5 million.
Block 9 is a large and under-explored area of more than 10,000 km2 located at the northern edge of a hydrocarbon-producing basin called the Homs Basin, which contains the large Palmyra, Cherrife Da and Ash Shaer fields.
Under the terms of the Block 9 PSC, Loon has a first phase exploration period of four years during which it has committed to acquire 600 kilometers of 2D seismic and drill two exploration wells. The exploration period can be extended for up to nine years in phases by performing additional work on an agreed basis.
Loon has a 100% interest and is the operator of Block 9. ANSCO Inc., subject to the approval of the Ministry and SPC, has the right to acquire a 5% working interest in Block 9 on a heads-up basis.
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