United Kingdom : Argos Resources Limited Completion of Participation Agreement.
Argos Resources Limited, the Falkland Islands based company which holds a 5% Overriding Royalty Interest in Licence PL001 in the North Falkland Basin announces that it has signed a Participation Agreement with Noble Energy Falklands Limited (Noble) and Edison International S.p.A (Edison) that replaces the Farmout Agreement between the Parties.
The Company announced on 12 February that it had received notification from Noble, the Operator of Licence PL001, of an event of Force Majeure resulting in them being unable to drill an exploration well on the Licence using the Eirik Raude rig. It was also announced at that time that a new Participation Agreement between the Parties would be entered into, replacing the Farmout Agreement, to address the various changes created as a consequence of the Force Majeure event.
The principal terms of the Participation Agreement are:
The Farmout Agreement has been terminated and replaced by the Participation Agreement on the effective date of the execution of the Participation Agreement.
The Parties confirm that the Overriding Royalty Interest in favour of Argos remains in place at 5% of the petroleum delivered, appropriated and won from Licence Area PL001.
The Parties have agreed that Noble and Edison will make quarterly cash payments to Argos totalling 300,000 per annum in place of the Pre-Production Payments provided for within the Farmout Agreement.
The terms of Licence PL001 provide that a well must be drilled by the end of the Second Licence Term in November 2016 if the Licence is to be extended into Phase 3.The Parties have agreed to seek an extension of the Licence period from the Government to allow for additional time for such a well to be drilled as provided in the Licence.
The ongoing cash payments are lower than the previously announced US$800,000 annual payment contained in the Farmout Agreement, to reflect the longer period over which future payments may now be made. The Company has already implemented cost reductions to ensure that these payments should be sufficient to meet its ongoing running costs.
Ian Thomson, Chairman of Argos, commented: "The Participation Agreement has been completed promptly and in a very co-operative way between the Parties as we respond together to the consequences of the Force Majeure event. Our Overriding Royalty Interest in the Licence will continue into any extension period agreed and our future running costs are covered, so we remain well positioned. Both Noble and the Company continue to be very positive about the exploration potential of the Licence Area".
[c] 2016 Al Bawaba (Albawaba.com) Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Date:||Feb 25, 2016|
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