Sonoro announced that its wholly owned subsidiary, Sonoro Energy Iraq, and its partner, Berkeley Petroleum Mesopotamia Asphalts Limited (together, the "Licensee"), have signed an Asphalt License Agreement (the "Agreement") with the Al-Salah ad Din Provincial Government in the Republic of Iraq.
The Salah ad Din Province lies just to the North of Baghdad and lies within the trend of mega oilfields including production of roughly 300,000 barrels oil equivalent per day. It is estimated that Iraq may hold the world's fourth largest heavy oil resources behind Canada, Venezuela and Russia. The key terms of the Agreement are the following:
Sonoro Iraq will have a 70% working interest and will be the operator and Berkeley will have a 30% working interest.
Licensee has the exclusive rights to explore, develop and produce asphalts and related organics within the entire Al-Salah ad Din
Province and to sell the asphalts and its related organics produced (and/or the by-products after processing) domestically and/or internationally.
The Agreement provides for an initial exploration period of 5 years and is followed by a 30 year exploitation period with extensions for any carved out exploitation areas to develop asphalts and related organics.
Licensee has the right to construct and operate asphalt-heavy oil topping facilities within the Al-Salah ad Din Province, with certain processing capacity commitments.
Licensee is entitled to 50% of the revenues from the sales of asphalts and related organics (and its by-products after processing), after tax and after cost recovery.
80% of the revenues are available for cost recovery. Licensee is committed to a minimum initial investment commitment of US $1.5 million.