Bordeaux Energy Inc. has closed its participation agreement with Savant Alaska under which Bordeaux will earn a 30% undivided interest in seven leases currently held 100% by Savant, located on and offshore the North Slope of Alaska.
The Leases are situated 20 kilometer from the 13.6 billion barrel Prudhoe Bay oil field and immediately adjacent to the 120 million barrel Liberty field operated by BP, but not yet in production.
Bordeaux expects drilling of the first exploratory well will begin in late-February 2008 and will take approximately 30 days to reach target depth. The exploratory well will be drilled to a depth of approximately 11,000 feet to test a prospect identified by Savant on a large 3D seismic survey that was acquired in 1993 and 1995. The well is expected to cost a total of U.S. $16 million to drill, case and test.
Under the participation agreement, the company has the right to earn an undivided 30% working interest in the Leases by paying 30% of the land and data costs (approximately US$1,200,000) and 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, Bordeaux 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.
In other news, Bordeaux also announces that the corporate continuance approved by shareholders at the company's June 6, 2007 shareholders meeting has been completed, and the company is now governed by British Columbia corporate law.
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