Start Scientific, Inc. has entered into a Farmout Agreement with Durban Energy, Inc., located in Jackson, Mississippi. The Company has until July 10, 2015 to commence drilling a new well on the farmout acreage.
The Company will receive 100% of the net revenue until payout of all costs, at which time the Company will assign a 25% working interest to Durban and partners.
There is a 30% royalty burden on the leases, which means that before payout the Company will have 70% of net revenue and after payout the Company will have 52.5% of net revenue and Durban will have 17.5% of net revenue. Each well will be treated separately for payout calculation.
The Fayette Field is located in Jefferson County, Mississippi, 6 miles northwest of the town of Fayette and 21 miles northeast of the city of Natchez. Humble Oil Company made the discovery in August of 1945 with the completion of the No. 1 M. R. Smith. This well was completed in the Lower Tuscaloosa Massive sand, and tested 229 BOPD of 40-degree gravity oil with 2,000 pounds of flowing tubing pressure.