Bontan announced the following:
347/Myra and 348/Sara Licenses
Geoglobal Resources (India) has been appointed as operator for the two offshore licenses, 347 Myra and 348 Sara, in which Bontan holds an indirect 11% net working interest through its interest in Israel Petroleum. An application was submitted on May 20, 2010 to the Petroleum Commissioner to approve transfer and registration of the participation rights in the two licenses.
GGR will acquire a 5% working interest in the two licenses from the existing partners proportionately from their respective shares. Thus, Bontan's indirect working interest in the two licenses, through its 76.79% interest in IPC, will change from 11% to 10.450% upon such acquisition. GGR is also given an option to acquire an additional 5% of the Sara and Myra licenses from the existing partners in accordance with their relative share in the transfer request. GGR will pay their share of expenses incurred by the existing partners to date. A joint Operating Agreement will be signed with GGR within sixty days.
GGR has applied separate from IPC and its partners, for the "Samuel" License, an additional license located within the territorial waters of the State of Israel. As per the agreement signed between IPC and its partners and GGR, as operator, GGR has agreed to grant the existing partners of the Sara and Myra licenses an option to purchase up to 12.5% in accordance with their pro rata share if the license is granted to GGR by the Petroleum Commissioner. The exact cost of acquisition is not yet determined.
Michal License (within Benjamin Permit)
An application has been submitted with the Ministry of Petroleum for the "Michal" license where GGR is named as operator with a 5% working interest. If granted Bontan's share will be 10.450%. The Operator is again granted an option to acquire an additional 5% from the remaining partners in accordance with their pro rata part in the license request. The Operator will have to pay, if they decide to exercise the option, for each 1% of the additional participation rights, half of the existing partners incurred expenses incurred to the date of the application.
Kam Shah, CEO of Bontan, commented, "We are very pleased that GGR has agreed to become our operator. They bring significant experience and expertise in deep water exploration that will allow our group to ultimately maximize our drilling opportunities in the East Med. We look forward to a successful partnership."
About The Offshore Israel Project
The Offshore Israel Project is comprised of two Licenses - Sara and Myra. These licenses cover approximately 310 square miles and are located in the Levantine Basin near the recent 6.3 TCF Tamar 1, Tamar 2, and the Dalit natural gas discoveries by Noble Energy.
The rights to licenses are held by a group comprising of Bontan's majority-owned, Israel Petroleum, Tel Aviv-based Emanuelle Energy, IDB-DT Energy, and PBT under an Agreement entered into on March 24, 2010.
The rights to licenses are currently listed in PetroMed's name on the registry maintained by the Israel Ministry of National Infrastructures ("MNI"). PetroMed is now effectively controlled by one of the group members and has given unconditional release to the group for transfer of its rights. Conditioned on the MNI's transfer approval, IPC, Emanuelle IDB-DT, and PBT will receive respective working interests on the Registry of 14.325%, 50.865%, 25.56%, and 9.25% in PetroMed's share of the Licenses.
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