17th Apr 2014 15:18
LONDON (Alliance News) - PetroNeft Resources PLC said Thursday that it had inked a farmout agreement with Oil India Ltd for a 50% interest in its Licence 61 at Tomsk Oblast, Russia.
Oil India Ltd will invest USD85 million, including a USD35 million upfront cash payment, USD45 million in exploration and development expenditure and a USD5 million performance bonus.
PetroNeft will remain as the operator of the licence.
The agreement is subject to regulatory and shareholder approval at the company's extraordinary general meeting May 9. It expects this to be completed by the end of May.
Following completion of the farmout, PetroNeft will begin a six well drilling campaign.
PetroNeft said that it will repay its existing debts, and have funds available to invest in the licence.
Oil India will be able to get 50% of production and reserves on the licence.
Shares in Petroneft were trading up 2.0% at 5.72 pence Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @hanassallnews
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