Eaglewood Energy reports PPL 259 farmouts
Eaglewood Energy Inc. has executed farmout agreements with Ketu Petroleum Ltd, a wholly owned subsidiary of Horizon Oil Ltd and Mega
Eaglewood Energy Inc. has executed farmout agreements with Ketu Petroleum Ltd, a wholly owned subsidiary of Horizon Oil Ltd and Mega Fortune International Ltd, currently a 10% equity participant in Eaglewood's PPL 259 and PRL 28.
Each farmout is for 25% of Eaglewood's 90% equity interest in PPL 259 in the Western Province of PNG. In the event of completion of both transactions, Eaglewood will continue to own a 40% equity interest in PPL 259 and retain operatorship.
Horizon is the operator of PRL 4 which contains the Stanley discovery and is adjacent to the western end of PPL-259. Horizon is also the operator of PRL 21 which contains the Elevala and Ketu discoveries and is adjacent the Ubuntu-1 discovery (PRL-28) drilled by Eaglewood last year. Mega was already an equity participant in PPL 259 and as such had a right to acquire an additional 25% on the same terms as the Horizon transaction.
To earn their respective 25% interests, each of Horizon and Mega will pay to Eaglewood USD $15.4 million, comprised of USD $2.68 million upon completion of the agreement for Eaglewood's sunk costs, and in addition to funding their 25% equity position, each will pay USD $1.375 million to cover Eaglewood's expenses in the upcoming PPL 259 seismic program and USD $5 million to cover Englewood's expenses in the next well to be drilled in PPL 259.
Both transactions are conditional upon receipt of regulatory approvals and other customary conditions.
CEO Brad Hurtubise commented "We are very pleased to have received our PPL 259 license extension and be able to execute both these agreements. Following our success on Ubuntu in PRL 28, Mega has proposed to increase its' equity in the PPL 259 licence and we will also upon completion have Horizon as a new partner in PPL 259. These transactions give us significant additional capital to deploy in PPL 259 plus all the benefits of having a new and experienced partner actively operating in the immediate area. We will be acquiring additional seismic in Q1 to refine our next PPL 259 drilling target, which we expect to drill in the second half of 2012 and we will now be fully funded to execute this seismic and drilling program."