Bridge Resources Corp. on behalf of its U.K. wholly owned subsidiary Bridge North Sea Ltd. reports that it has reached an agreement to purchase the 8% royalty on Blocks 48/21a and 48/21b from Warwick Energy Limited. The blocks contain the Durango gas prospect that is currently being appraised by the 100% working interest 48/21a-4 well, currently drilling below 20" casing.
Under the terms of the agreement, Bridge will pay Warwick a Pounds Sterling 1,000,000 non-refundable deposit in return for the right to purchase the royalty outright for an incremental Pounds Sterling 2,000,000 payment prior to June 30, 2008.
The purchase would realize 3.4 bcfe contingent resources to Bridge based on the current P50 Durango contingent resources estimate of 42.4 bcfe. The Pounds Sterling 3,000,000 purchase price equates to 8.8p/therm ($1.76/mcf). There are no incremental capital costs associated with a royalty purchase.
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