Primeline, CNOOC Agreements Take Effect
Primeline Energy Holdings Inc. has received notification from CNOOC that the Supplemental Development Agreement for LS 36-1 gas field (the "SDA") signed on 17th March has been ratified by China's Ministry of Commerce and has become effective. The SDA confirms that CNOOC exercises its right under the Petroleum Contract relating to Block 25/34 to take a full participating interest of 51% in the LS 36-1 gas field, and act as operator through its wholly-owned subsidiary CNOOC China Limited Lishui Operating Company.
As announced on 19th March, CNOOC entered into a number of agreements with Primeline and Primeline Petroleum Corp. on 17th March to cover various aspects of the LS 36-1 gas field development, including the SDA, a Joint Operating Agreement, an agreement relating to the implementation of the development and procurement and cost control principles and a letter agreement amending a previous agreement relating to the terms of the Petroleum Contract. With the ratification of the SDA, all of these development agreements have now become effective. CNOOC is now formally the operator for the LS 36-1 development operations and will commence development preparations, whilst Primeline and CNOOC prepare to submit the Overall Development Programme (ODP) for the LS 36-1 development for full Chinese government approval.
In the meantime, Primeline is continuing its post-well evaluation work following the completion of the LS 35-3-1 discovery well.