Falkland Oil and Gas in farmout agreement involving license areas and cash
The exploration company Falkland Oil and Gas Ltd. (FOGL) has entered a farmout agreement with an unnamed party for its licenses south and east of the Falkland Islands.
The potential partner also has an option for an associated joint operating agreement (JOA), although FOGL would retain license operator-ship. FOGL expects confirmation of the farm-out within the next two months, prior to the start of its latest drilling program.
Under the agreement, the counterparty would take a 25% interest in FOGL license areas and contribute its share of costs for two planned exploration wells in 2012. It would also pay a share of costs incurred last year in preparation for drilling.
In addition the counterparty will make a cash contribution of 40 million dollars: 20 million on completion (expected to be prior to the spudding of the Loligo well) and 20 million in 2013.
FOGL expects to receive the semi-submersible Leiv Eiriksson rig in June after it has drilled the first two wells’ of Borders & Southern Petroleum’s Falkland campaign, on the Darwin and Stebbing prospects. Rig issues interrupted progress on Darwin, and operations here could take another four to five weeks to complete, according to a report this week from Borders & Southern.
Tim Bushell, the chief executive of FOGL, said: “We are delighted to have agreed favorable farm-out terms which we assess as a two for one promote on the first two wells. This farmout provides further external industry confirmation of the technical case and gives us greater flexibility with respect to our drilling plans. We look forward to progress our drilling campaign in the next few months”.
According to the terms of the deal, FOGL will receive an option fee of 6 million dollars, which FOGL will retain if the counterparty does not exercise the option before the spudding of the Loligo well (currently expected to be June 2012).
If the Option is exercised, 3 million of the option fee will be offset against the first 20 million of cash consideration referred to above, whilst FOGL will retain 3 million.
In the event that the counterparty has not exercised the option prior to an announcement by Borders and Southern on the results of either the Darwin or Stebbing wells and such announcement results in a significant increase in FOGL share price, then “an adjustment mechanism will apply”.
FOGL will have the right to reduce the counterparty's interest to 12.5% in the Southern Licence Area, but with the counterparty paying the same 40 million cash consideration
The counterparty may elect to remove the Southern Licence Area from the FOA and reduce the overall cash consideration by 10m; or the counterparty may elect to pay an additional 10m to increase its interest in the Southern Licence Area back to 25%.
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Chuckle chuckle
www.youtube.com/watch?v=UyPC0SD0PGw
Wonder why they'd do that.......
because its a hedge fund with the right political connections - we live in a corporate society now, remember?
british government finally admit they made another balls-up with the new aircraft carriers. Carriers wont be retrofitted with cats now and the MOD will be buying the VSTL F35b......like I predicted 3 months ago hehe.
By the way, the USAF simply love their new Harriers (which they got for peanuts from britain) so much they are doing a re-design to make one supersonic as a feasibilty trial.
No wonder Sandy Woodward is bright red in the face after being told the good news hehe
Hows the sopwith pups doing in the argie top gun airforce?
Procurement decisions are very complex and often don't go to plan but you'd not understand that with Argentina's rather pathetic budget. The UK spends over 21 times as much each year on defense.
However the good news is the F35B looks a awesome bit of technology!
As for the Harriers the USAF are welcome to those museum pieces!
F35Bs look nice. Fly them around the South Atlantic a bit staring at Argies.
www.navytimes.com/news/2012/02/ap-senators-question-pentagon-decision-on-f35b-020612/
US navy forgets F35 and buys more super-hornets as operational date for f35 is pushed back to 2018.
www.f-16.net/news_article4462.html
US marines dont want f35 as they are happier with their new fleet of harriers...which they got cheap chuckle chuckle
www.f-16.net/news_article4462.html
@8 No the F-35B is not “awesome” technology. It's basic cobbled-together crap.
@9 The F-35B is crap. Only good for temporary use by a MEF (Marine Expeditionary Force). The RN should have the F-35C. Or, preferably, a navalised version of the Eurofighter Typhoon. How about the Eurofighter Vortex?
www.guardian.co.uk/uk/2012/mar/20/falkland-islands-30-years-on-thatcher
We don't seem to be doing much of the design and build of these sorts of things these days. Better to just make your own like the French do, even if it is a little less good.
Greek, I think you maybe correct, British engineering is truly superb but overall it should cost more to build and design your own.
The Type 45, Challenger 2, Typhoon, Astute class, Starstreak are all great bits of kit that have for the most part been designed by the UK.
Although the military is smaller than it was the kit we have is truly superb.
The issue is the lack of engineers in the UK, and the fact they're paid £0.3 per hour, so they all go to live in Germany.
www.youtube.com/watch?v=xDPK1kPWj1E
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