DNO & PA Resources Ink Farm-out Deal on NCS
DNO has agreed to several farm-outs of parts of its working interests in its Norwegian Continental Shelf portfolio in return for a carry on DNO's remaining exploration cost.
Det Norske Oljeselskap AS, a wholly owned subsidiary of DNO ASA, has signed a Sales and Purchase Agreement to farm-out parts of its working interests in eight licenses on the Norwegian Continental Shelf to PA Resources Norway AS.
The SPA sets out terms whereby the costs of up to six exploration wells relating to DNO's retained working interest, at a cumulative budget cost of NOK 285 million excluding contingency, will be carried by PAR. Through the rig contract announced on January 16, 2006, DNO has secured 340 rig days which should allow for drilling of 6-8 wells within DNO operated licenses during the 3 years period starting 4Q06.
The transaction relates to the following licenses on the NCS:
PL 001B/PL242 (including the West Cable discovery and West Cable North and Draupne prospects):
PL 028B (including the Hanz discovery):
PL305/PL305B/PL341 (including Lie, Thorkildsen, and other prospects):
PL332 (including 2/2-1, 2/2-2 and 2/2-5 oil and gas discoveries, and one prospect):
PL334 (including two prospects):
Gross unrisked resources within the above licenses are estimated to 491 million barrels of oil equivalents. Following this transaction, DNO's remaining share of the unrisked resources within the above licenses is estimated at 146 million barrels oil equivalents.
The effective date of the transfers is 1st January 2006, and the transactions are subject to approval from the relevant Norwegian authorities and the Management Committees of the relevant licenses.
Managing Director Helge Eide comments:
"DNO is very pleased with this transaction which is meeting our important objective to transform resources to reserves at low costs. This also allows for DNO to free additional funds to further accelerate its exploration efforts on NCS during the coming years."
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Company: PA Resources more info
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