TG World has signed farm-in agreements for a 12.5% equity interest in two Philippine offshore development ready oil discoveries.
The property, known as Service Contract 54A ("SC54A") is located offshore in the North West Palawan Basin of the Philippines covering an area of 867 square kilometres. SC54A contains two development ready oil discoveries, Tindalo and Yakal, where aggregate contingent resources oil in place of 16 million barrels (P50) has been independently verified by ISIS Petroleum Consultants Pty Ltd. as of February 2009 (Tindalo 11.0 mm bbls, Yakal 5.1 mm bbls).
Project partners in SC54A, after the farm-in is complete, include project operator Nido Petroleum Ltd. of Perth, Australia at 42.4%, Kairiki Energy Ltd. of Perth, Australia at 30.1% and Trafigura Ventures III B.V. of Singapore at 15%. TG World will receive 7.6% of its acquired interest from Nido and 4.9% from Kairiki.
Consideration for the 12.5% interest totals US $11.1 million and is comprised of approximately US $5.25 upon execution of the farm-in agreements and the balance paid in staged payments following first oil and subsequent crude offtakes. TG World is also responsible for its share of costs to first oil which is expected in Q2 2010. Funds are provided by TG World from cash on hand. The transaction is subject to approval of the Philippine government.
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