ROC advises that, its wholly owned subsidiary, Roc Oil (Equatorial Guinea) Company and its co-venturers Atlas Petroleum International Limited and Osborne Resources Limited have entered into an agreement to settle the dispute with Pioneer Natural Resources Equatorial Guinea Limited, a wholly owned subsidiary of Dallas based Pioneer Natural Resources Company with regard to Blocks H15 and H16 (collectively "Block H"), Offshore Equatorial Guinea.
The dispute related to the 2004 farm-in, whereby Pioneer acquired a 20% interest in the Block H Production Sharing Contract and Joint Venture from ROC.
Key terms of the dispute settlement are as follows:
1. Payment by Pioneer to ROC, Atlas and Osborne of US $5.5 million (ROC net: US $2.75 million);
2. Assignment by Pioneer of its 50% interest in the PSC and under the JVOA to ROC, Atlas and Osborne. As a result, ROC will hold a 37.5% interest in Block H;
3. Pioneer Natural Resources USA Inc. will assign to ROC an option to use the Aban Abraham drilling rig to drill the proposed Aleta-1 well. The rig is currently expected to be available in 2H 2009.
Settlement of the dispute is subject to relevant Government approvals for assignment of the Pioneer interest and satisfaction of conditions in the rig contract relating to assignment of the rig.
Participating Interests in the Block H Joint Venture are ROC with 18.75% pre-settlement (37.5% post-settlement); Atlas (operator) with 28.125% pre-settlement (56.25% post-settlement); Osborne with 3.125% pre-settlement (6.25% post-settlement); and Pioneer with 50% pre-settlement (0% post-settlement).
Mr Bruce Clement, ROC's Acting Chief Executive Officer ,stated that: "ROC views this as a good outcome for all parties. ROC will now seek to bring in a new partner to participate in the drilling of the Aleta prospect, an interpreted Cretaceous channel sand body with stacked potential reservoirs. ROC considers the prospect to have an unrisked mean recoverable reserve potential in the primary target reservoir of the order of 170 million barrels gross ranging up to 500 million barrels gross, if all potential reservoirs are considered, with a series of follow-on prospects and leads."
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