Niko Resources Provides Update on India Operations
Niko has temporarily suspended gas sales to the Essar industrial complex at Hazira, India due to Essar's failure to comply with its contractual obligations. Negotiations are underway to resolve the issue in order to allow sales to resume. Net sales to Essar were approximately 13 mmcf/day.
Four additional gas sales contracts for the Hazira field (Niko has a 33.33% interest) have been executed with various Gujarat State entities including Gujarat State Energy Generation Limited at 30 mmcf/day, Gujarat Alkalies & Chemicals at 18 mmcf/day and Gujarat Powergen Energy Corporation at 7.5 mmcf/day and Gujarat State Electricity Board at 7.5 mmcf/day. All are ten-year contracts with the gas price set for the first five years at the Indian Rupee equivalent of US $3.45 per mcf. Two contracts (16 mmcf/day net) are scheduled to commence production in the fall of 2001 and two in the spring of 2002.
The rig contracted for drilling the next set of wells on the Company's Land Based Drilling Platform at Hazira has been mobilized and will commence drilling by mid August.
The Production Sharing Contract for the 160 square mile onshore Surat block has been signed. Drilling will commence on its 15 well drilling commitment later this year.