Cambay Field Farm in with 50% Participating Interest and Operatorship

Selan Exploration Technology Limited ("Selan" or "Company"), with the Board of Directors approval, has executed a farm in farm out agreement with Synergia Energy Ltd. and its group company ("Synergia Group") for the 'Çambay Field' ("Cambay PSC"). Synergia Energy Ltd. is incorporated in Australia, with its shares listed on the AIM market of the London Stock Exchange.

Highlights

- The Company has agreed to farm in 50% of the 100% participating interest held by the Synergia Group in the Cambay PSC. The Cambay Field is a producing Oil and Gas Field.

- The farm-out and associated joint operating agreement are conditional upon customary consents from the Government of India ("GoI") for the transfer of the 50% participating interest to Selan and Selan assuming a Lead Joint Operator role ("GoI Approval").

- Both Synergia Energy Ltd. and Selan are focused on developing the Cambay PSC Eocene gas and gas condensate reservoir which contains independently certified 2P gas resources in excess of 200 BCF.

Summary of the transaction

- In exchange for the 50% participating interest

- Company will pay Synergia Group a cash payment of US$2.5 million immediately following GoI Approval

- Company will carry Synergia Energy Ltd. for up to US $10 million for Synergia's share of capital spends in the Cambay PSC, through an agreed work programme ("WP") comprising of 3 new wells including 1 horizontal well and workovers in 3 exiting wells

- The WP is to be completed within 18 months (with a 6-month extension provision) of the later of:

- GoI approval of the WP
- or the award of contracts relevant to execute the WP

- Synergia will be entitled to sales bonus of up to US$ 9 million, linked to future cumulative gas sales thresholds being achieved as follows:

- US$0.5 million on future cumulative gross gas sales from Cambay PSC exceeding 5 bcf
- US$1.0 million on future cumulative gross gas sales from Cambay PSC exceeding 10 bcf
- US$1.5 million on future cumulative gross gas sales from Cambay PSC exceeding 15 bcf
- US$2.0 million on future cumulative gross gas sales from Cambay PSC exceeding 35 bcf
- US$4.0 million on future cumulative gross gas sales from Cambay PSC exceeding 70 bcf
- Selan has the option to participate in the Carbon Capture Storage scheme in Cambay
- The farm-out agreement contains customary representations & warranties given by both sides. The agreement is governed by Indian laws.

Shares of Selan Exploration Technology Limited was last trading in BSE at Rs. 488.00 as compared to the previous close of Rs. 469.60. The total number of shares traded during the day was 8859 in over 560 trades.

The stock hit an intraday high of Rs. 501.30 and intraday low of 450.70. The net turnover during the day was Rs. 4280840.00.

Source : Equity Bulls

Keywords

SelanExplorationTechnology INE818A01017 Agreement SynergiaEnergy CambayField