Broad-based resources company Range Resources has entered into a significant farm-in agreement with the Korea National Oil Corporation in the Puntland area of Somalia.
Broad-based resources company Range Resources has entered into a significant farm-in agreement with the Korea National Oil Corporation in the Puntland area of Somalia.
The 75 per cent farm in arrangement includes a $13.43 million sign on fee, and minimum exploration of around $33.25 million over two years for KNOC to acquire 75 per cent of the area.
The company believes the agreement will be a significant step towards its goal of attracting international partners to assist Range in the exploration and development of Puntland's mineral and hydrocarbon assets.
The agreement is subject to due diligence and a formal agreement.
In the event of KNOC proceeding, Range would hold the residual 25 per cent interest, with 12.5 per cent then being taken up by its joint venture partner Consort Private Ltd.
Range Resources Australian projects are based around three sites in south west Western Australia, at Donny brook, and Calyerup Creek and Forrestania further to the east.
THE FULL MEDIA RELEASE APPEARS BELOW.
KOREA NATIONAL OIL CORPORATION LETTER OF INTENT
As referred to in the ASX Announcement dated 20 April 2006, the Company is pleased to announce that it has entered into a letter of intent with the Korea National Oil Corporation ("KNOC") in respect of a 75% farm in to a concession area in the Noogal Area comprising a portion of the former Blocks 28 and 29 following key meetings held in the middle east last week. Key terms of the letter of intent include:
- US$10m sign on fee;
- Minimum exploration of US$25m over 2 years to earn 75% of the area; and
- 45 day formal due diligence period with the letter of intent and subsequent formal agreement to become legally binding upon a decision to proceed.
In the event of KNOC proceeding Range would hold the residual 25% (contributing interest following minimum spend) interest with the acquisition of the 12.5% interest from the Company's joint venture partner Consort Private Limited for an agreed formula based on the farm in terms.
The Board believes that the letter of intent is a significant step as the Company moves towards attracting a number of key international partners in assisting it with the exploration and development of Puntland's mineral and hydrocarbon assets.
Range looks forward to updating shareholders on key activities in Puntland.
