Leighton Prospect (Global earning a 15% WI)
Global is farming in to the Leighton oil prospect owned by Texon Petroleum Limited.
Drilling of the Leighton prospect commenced in September 2008. Texon have advised that the first well on the Leighton prospect - Peeler #1 has tested oil and gas at an unstablised rate of approximately 400 barrels of oil equivalent per day (boepd) comprising some 250bopd and 900 mcf of gas per day and 90 barrels per day of water through a quarter inch choke at a flowing pressure at the surface of about 1,500psi.
Texon advised that the amount of water being recovered has been steadily dropping throughout the test. The water is from the fracture stimulation procedure that was applied to enhance production from the oil and gas reservoir.
Early analysis of the oil by Texon indicates that it is a light oil. The gas has a heating value of about 1,350btu/cubic foot, which will achieve a premium sales price, possibly one third above the benchmark Texas gas price.
The well is already connected to oil tanks and is expected to be connected for gas sales in the next 7-10 days, at which time stabilised flow rate information will be able to be obtained.
On the basis of these results, Texon is planning to drill a second well and possibly further wells on the Leighton prospect as soon as possible. In regard to the second Leighton well, Global has the option to participate in the well on the same terms as Peeler #1 (refer ASX/AIM release dated 15 August 2008).
Any subsequent wells drilled on Leighton will be at each company's earned working interest.
Kenya (Global 20%)
As announced previously, notice has been given to Woodside Energy (Kenya) Pty Limited ("Woodside") terminating the Farm-In Agreement ("FIA"). The termination notice has been given based on Woodside's refusal to drill a second exploratory well in the project area in accordance with the FIA and its failure to take any steps to remedy this refusal, which the Company considers to be a repudiation and breach of the FIA.
The Company and joint venture partner Dana Petroleum (E&P) Limited have commenced legal proceedings in the English High Court of Justice to recover losses suffered as a result.
Malta Exploration Study Agreement Area 3 - Blocks 4 & 5 (Global 80%)
RWE Dea AG ("RWE"), which has farmed into Global's interest in the Exploration Study Agreement covering Blocks 4 & 5, has the right to earn up to a total 70% interest if the parties enter into a PSC with the Malta Government and RWE commits to the drilling of a well. The Maltese Government have not granted an extension to the Exploration Agreement that expired on 30 June 2008 however RWE are continuing talks with a potential farminee.
The Board continues to review opportunities for other acquisitions, joint ventures, or investments in the resources sector, both domestic and overseas, which may enhance shareholder value.
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