Up & Outbound: New Petroleum Contract Expands Territory, Adds Flexibility for Drilling Wells
Primeline Energy Holdings Inc. (TSXV: PEH) currently has a major interest in a Petroleum Contract with China National Offshore Oil Corporation (CNOOC). A major player in China's oil & gas industry, CNOOC is the largest producer of offshore crude oil and natural gas, and one of the largest in the world. Through its partnership with CNOOC, Primeline as an independent upstream oil and gas company benefits from CNOOC's technical and operating expertise and also receives preferential rates for engineering procurement and construction, aspects that support its aim to become a major supplier of gas and oil to the East China market.
Recently Primeline signed a Memorandum of Agreement with CNOOC, July 15th 2011, to amend its existing Petroleum Contract for Block 25/34: Lishui 36-1 and enter into a new contract for an expanded area. Block 25/34 is adjacent to the most populous and developed part of China with growing gas energy needs.
Primeline and CNOOC will execute a new contract covering 5,877 km2 will contain substantially all of the land in the existing contract plus an increase of 656 km2 adjacent to the left of the current field and will be designated as Block 33/07. The new agreement allows for a seven-year exploration term, split as three, two and two years. The corresponding work com-mitments are 600 km2 of 3D seismic plus two wells during the 1st period, and one well in each of the 2nd and 3rd periods. Any future discoveries in Block 33/07 will be eligible for access to the production facilities established at the LS36-1, subject to spare capacity and the production paying its proportionate share of its operating costs.
The major advantages that Primeline receives from the arrangement are the larger exploration area and, more importantly, a greater flexibility in its drilling schedule. Under the old agreement, the Company was required to drill two wells before April 2013, whereas now they only need to drill one well by mid-2014.
A parade of newsworthy developments is expected in the coming weeks and months. The next step, expected shortly, will be the submission of the Overall Development Plan (ODP) by CNOOC to the government for approval. Once approved, the ODP confirms the projects' commercial viability, so PEH discussions can advance with various banks for project financing. Since the project aligns consistently with east China's public development plans, Primeline has enjoyed unprecedented support from partners, shareholders and government agencies to date. In the next couple of weeks we can expect news regarding the status of project financing and developmental updates, building up to construction starting in autumn 2011.
For further information please contact CHF Investor Relations: Robin Cook, Senior Account Manager, T 416-868-1079 x228, robin@chfir.com or visit www.primelineenergy.com.
Recently Primeline signed a Memorandum of Agreement with CNOOC, July 15th 2011, to amend its existing Petroleum Contract for Block 25/34: Lishui 36-1 and enter into a new contract for an expanded area. Block 25/34 is adjacent to the most populous and developed part of China with growing gas energy needs.
Primeline and CNOOC will execute a new contract covering 5,877 km2 will contain substantially all of the land in the existing contract plus an increase of 656 km2 adjacent to the left of the current field and will be designated as Block 33/07. The new agreement allows for a seven-year exploration term, split as three, two and two years. The corresponding work com-mitments are 600 km2 of 3D seismic plus two wells during the 1st period, and one well in each of the 2nd and 3rd periods. Any future discoveries in Block 33/07 will be eligible for access to the production facilities established at the LS36-1, subject to spare capacity and the production paying its proportionate share of its operating costs.
The major advantages that Primeline receives from the arrangement are the larger exploration area and, more importantly, a greater flexibility in its drilling schedule. Under the old agreement, the Company was required to drill two wells before April 2013, whereas now they only need to drill one well by mid-2014.
A parade of newsworthy developments is expected in the coming weeks and months. The next step, expected shortly, will be the submission of the Overall Development Plan (ODP) by CNOOC to the government for approval. Once approved, the ODP confirms the projects' commercial viability, so PEH discussions can advance with various banks for project financing. Since the project aligns consistently with east China's public development plans, Primeline has enjoyed unprecedented support from partners, shareholders and government agencies to date. In the next couple of weeks we can expect news regarding the status of project financing and developmental updates, building up to construction starting in autumn 2011.
For further information please contact CHF Investor Relations: Robin Cook, Senior Account Manager, T 416-868-1079 x228, robin@chfir.com or visit www.primelineenergy.com.
Source...