ASX:BCC) is pleased to advise that a non binding Letter of Intent ("LOI") has been executed with a US based public company ("Farm-In Party") to farm-out the following projects that are currently 100% owned by the Company:- Southern Cross Unit;
- North West Cook Inlet Unit; and
- North Cook Inlet Unit - Deep Oil Rights.
The Farm-In party will pay 100% of the costs associated with two wells in each of the above projects for which it will earn a 49% working interest.
In addition the Farm-In Party will be granted an option to earn a 49.0% working interest in the Company's 100% owned onshore West Eagle project by paying 100.0% of the costs of the first two wells.
Buccaneer will retain a 51.0% working interest and the role of Operator in all of the above projects. Additionally, the Company will retain its existing working interest in both the Kenai Loop Project (100%) and Cosmopolitan Project (25%).
The LOI contemplates that on completion of the above wells and the assignment of a 49.0% working interest to the Farm-In Party that all future expenditure on the above projects will be based on individual working interest ownership.
The LOI stipulates that the Endeavour jack-up rig must be used on all off shore drilling that is subject to this LOI.
The LOI provides the basis for the parties to negotiate and if agreed, execute, a binding Exploration and Development Agreement ("Agreement") at which time further details will be disclosed. The LOI acknowledges that the proposed transactions will be subject to satisfaction of conditions, including board approval by both parties. The LOI will automatically terminate on 15 September 2013 if an Agreement has not been executed and either party may withdraw from the LOI at any time.
If the Farm-In party proceeds to drill all 8 wells subject to this LOI, total expenditure by the Farm-In Party is expected to be between US$150.0 - US$200.0 million.
Source: http://www.abnnewswire.net/press/en/75463/
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