Tajzha to Acquire Stake in Shallow Water Gulf of Mexico Blocks
Tajzha Ventures has entered into a Letter of Intent to acquire the participation rights to five oil & gas exploration blocks in federal waters in the Gulf of Mexico.
The exploration blocks are located in federal waters in the Gulf of Mexico offshore Texas, Louisiana and Alabama covering a total of 23,000 acres. All Blocks are in relatively shallow water ranging in depth from 100 to 240 feet, have 3D-seismic coverage and have fourteen 14 drilling targets identified. The first well is expected to be drilled in early 2008 in the Viosca Knoll Block 79 ("VK-79") at a depth of 2,900 feet. The estimated share of Tajzha's drilling costs is CDN $882,000 and completion costs is CDN $692,000.
The participation rights are currently held by an arm's length private USA company ("Privateco"). Tajzha intends to acquire all of the issued shares of Privateco for CDN $875,000, payable by the issue of 2,500,000 common shares of Tajzha at $0.35 per share.
Upon completion of the acquisition of Privateco, Tajzha will have the opportunity to earn a 30% working interest in the blocks by paying for 40% of the work programs outlined in the Participation Agreement with the operator. No property title or working interest will be transferred to Tajzha until Tajzha's expenditure commitment has been fulfilled.
To date, the operator and other joint venture participants have spent a total of approximately US $7 million on the acquisition of the leases, seismic and geological data. As part of the terms of the agreements, Tajzha will be required to reimburse the vendor up to 30% of these costs (US $2.1 million) from net production revenue. These costs are allocated by exploration block and net production revenue from each block will only be applied to costs for that block.
Tajzha has commenced its due diligence process and expects to have it completed before year-end. Completion of the acquisition is subject to due diligence and TSX Venture Exchange approval. There is no assurance that this transaction will close.
A finder's fee of $15,000 will be payable upon closing of the transaction.
Tajzha Ventures Ltd. is a junior oil and natural gas company based in Calgary, Alberta with core operated properties located in the Davey Lake and Provost Areas, Alberta. Tajzha is also a participant in a drilling venture located in North-eastern British Columbia. Tajzha's Common Shares trade on the TSX Venture Exchange under the symbol "TJZ".
- Tajzha Ventures Ends Keg River Drilling, Terminates GOM Letter of Intent (Dec 18)
- Tajzha to Acquire Stake in Shallow Water Gulf of Mexico Blocks (Nov 29)
- Tajzha Issues Update on BC Test Well (Mar 09)