Eden Energy announces joint venture and drilling commitment at Noah Prospectadmin
Eden Energy Corp. has signed a farmout and joint venture agreement with a Midland, Texas-based privately held company for the drilling of the Noah prospect in White Pine County, Nevada.
Under the terms of the farmout, Eden’s acreage block at Noah has been divided into four Prospect Areas, with each Prospect Area encompassing approximately 50,000 acres of leases. The partner will pay 2/3rds of the cost to drill, test and complete the first well in the first Prospect Block, and Eden will pay 1/3rd. The partner will act as operator. Upon drilling and completing the first well in Prospect Area 1, the partner will be assigned a 50% interest in Eden’s leases in Prospect Area 1.
Provided the partner has met its obligations in Prospect Area 1, it shall have the option to proceed to develop Prospect Area 2. If it elects to proceed with developing Prospect Area 2, the partner shall pay a prospect recovery fee of $2MM to Eden for costs incurred on Prospect Area 1 and shall have the right to earn a 50% interest in the Prospect Area by paying 2/3rds of any seismic programs and the drilling and completing to casing point of a second well. Thereafter, the partner shall continue to have the right to earn in subsequent Prospect Areas under the same terms but with no further prospect recovery fees.
The first well has been staked and is expected to be drilled to a total depth of between 7,000 and 9,000 feet, for an estimated cost of $4MM, which includes a $1MM contingency. The partner has commenced field work required for well permitting and expects to drill the well before December 31, 2007.
Eden has also signed an amendment to its Participation Agreement with Cedar Strat Corporation covering the Noah prospect. The amendment extends the deadline for drilling the Noah prospect and allows Eden and its partner to drill to a shallower depth than originally contemplated.
Information from: www.oilonline.com