Groundstar Resources has entered into an Agreement with Canacol Energy Ltd, subject to the approval of the government of Guyana and the TSX Exchange, whereby Canacol will acquire an additional 35% working interest in the Petroleum Prospecting License (PPL) in the Takutu Basin in exchange for a cash payment to Groundstar of US $3.45 million. Canacol's net working interest in the PPL will increase to 90%; Groundstar's net interest will reduce to 10% which will be carried by Canacol to first commercial production.
Groundstar will remain operator of the block through to completion of the first exploratory well expected to be drilled in the first half of 2010.
Groundstar has received an initial payment of US $1.20 million from Canacol as the first installment under the Agreement Terms. Under an existing Farm-in agreement, entered on March 11, 2008, Canacol would earn a 55% working interest by spending 100% of the first US $12.0 million spent on drilling the first 2 wells in the concession.
Groundstar views this Agreement in the best long-term interest of the Company in the Takutu Basin PPL. Due to their extensive experience in the countries of Colombia and Brazil, Canacol will contribute valuable expertise to the upcoming drilling campaign and future operation of the Takutu Basin.
Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in South America, North Africa and the Middle East.
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