South Texas Oil Co., Blue Moon Exploration Ink Project Agreement
South Texas Oil Company has entered into a definitive Project Agreement with the Blue Moon Exploration Company, a Houston-based privately held geological and geophysical prospect generation firm.
Select Terms of the Project Agreement
- STXX has retained Blue Moon Exploration to identify, lease and develop, in partnership with STXX, oil and gas prospects in the Project Area of Texas, Louisiana and the Gulf of Mexico.
- STXX has exclusive rights to a first-look at all prospects generated in the Project Area under the terms of the Project Agreement.
- STXX has access to all geological, geochemical, geophysical, seismographic, petroleum engineering data and other pertinent data customary in the oil and gas industry to best evaluate the prospects generated.
- Blue Moon shall devote substantially all of its time to generating prospect ideas in the Project Area.
- The term of the agreement is for three years beginning November 1, 2008.
- STXX has the option to act as operator, with a minimum 25% working interest and up to a 50% working interest, of all prospects to be drilled under the Project Agreement.
Mike Pawelek, President and CEO of South Texas Oil Company, said, "The Project Agreement with Blue Moon Exploration provides South Texas Oil and its shareholders with excellent access to varied-risk, 3-D defined, oil and gas prospects located in our Texas, Louisiana and Gulf Coast core operating areas. Our agreement is an excellent fit, as we will gain extensive additional geological and geophysical expertise provided by a team that has worked the Project Area for the majority of their 30-year careers.
"We also expect to benefit from Blue Moon's inventory of approximately 4,000 square miles of recent-vintage, proprietary 3D and 2D seismic data. The outsourced nature of the arrangement with Blue Moon also allows us to maintain a lean internal structure, with respect to general and administrative expense. For our part, we will provide the operational expertise to Blue Moon on all of the prospects in which we opt to participate. We are looking forward to working together to immediately identify high-quality drillable opportunities that can help us grow production and reserves. "
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