Parex Resources Inc. says that its subsidiary Parex Resources Ltd. has signed a farm-out agreement on the Moruga Block and has given notice that it will relinquish the Central Range Blocks.
Parex Trinidad entered into a farm-out agreement for the onshore Trinidad Moruga Block. Under the terms of the farm-out agreement, the farmee earned a 20% participating interest in the block after providing Parex Trinidad with a $2 million payment. The farmee, as contract operator will also earn an additional 31% participating interest in the block upon completion of:
◾ Paying 100% of Parex Trinidad's costs to work-over Snowcap-1 well and place it on production;
◾ Paying 100% of Parex Trinidad's costs to drill, complete and test an exploration well within 9 months of the farm-out agreement effective date; and
◾ Paying 100% of Parex Trinidad's costs to drill, complete and test a second exploration well within 6 months of the rig release of the first exploration well.
If all the Moruga Block farm-out agreement terms are fulfilled by the farmee, Parex Trinidad will transfer operatorship to the farmee and reduce its participating interest from 83.8% to 32.8%.