Range Resources, Strait to farm out interests in Georgian blocks
source: http://explorationanddevelopment.energy-business-review.com/news/range-resources-strait-to-f...
Range Resources and its Georgian partner Strait Oil and Gas UK have agreed the terms of a Heads of Agreement (HOA) to each sell 10% of their interests in Block VIa and Block VIb in Georgia to Red Emperor Resources.
The key terms of the HOA will see Red Emperor contribute 40% of the drilling costs for the planned two well program (capped at total gross costs of $14m - RMP contributing $5.6m) to acquire the 20% interest in the two blocks.
The company believes the transaction reduces its financial exposure to the two well drilling program through the favorable two-for-one farm-in terms, whilst still maintaining a significant 40% interest in the two blocks.
The HOA entered into with Red Emperor constitutes the execution of a share subscription agreement, pursuant to which Red Emperor will acquire its farm-in interest in the joint venture entity, by the parties by 28 February 2011 (or such later date as agreed by the parties).
The key terms of the HOA will see Red Emperor contribute 40% of the drilling costs for the planned two well program (capped at total gross costs of $14m - RMP contributing $5.6m) to acquire the 20% interest in the two blocks.
The company believes the transaction reduces its financial exposure to the two well drilling program through the favorable two-for-one farm-in terms, whilst still maintaining a significant 40% interest in the two blocks.
The HOA entered into with Red Emperor constitutes the execution of a share subscription agreement, pursuant to which Red Emperor will acquire its farm-in interest in the joint venture entity, by the parties by 28 February 2011 (or such later date as agreed by the parties).
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