Genesis announced that Sagex Petroleum UK Ltd., subject to BERR approval, will farm-in to the P1281 License relating to UKCS Block 9/5b. Genesis will currently retain an 80% interest in the License with Sagex taking 20%. Genesis will remain Operator.
The Sedco 704 semisubmersible drilling rig has commenced operations on the Block 9/5b exploration well and under the terms of the farm-in agreement, Sagex will fund their ongoing 20% interest in the block, carry a percentage of Genesis' costs in the well and pay certain historical costs.
Several other companies have expressed an interest in the Block and it is possible that other farm-in agreements may be reached before conclusion of the drilling operation. If no other farm-in agreements are reached by September 6, 2008, Sagex has an option to increase its interest to a maximum of 50%.
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