The KRG has the option to assign the 20% interest to a third party before 31 March 2013, in which case the carried costs will be reimbursed to Sterling and Addax and their paying interests will revert to their equity share of 53.33% and 26.67% respectively. If an assignment is not completed, the KRG may retain the 20% interest and pay its share of the costs from the effective date, 5 August 2012.
Sterling and Addax have also agreed to notify the KRG before 31 January 2013 whether the partnership intends to drill a further exploration well on the Sangaw North block before the end of the current exploration phase which runs to November 2013, with the option for a further one year extension in the event that further exploration and/or appraisal work is warranted. Under this agreement, if Sterling and Addax elect not to drill, then the PSC will terminate on 1 February 2013.
Angus MacAskill, Sterling's Chief Executive said:
"We are pleased to have completed the acquisition of additional 2D seismic data in the Sangaw North block and look forward to the integration and interpretation of this data, which may lead to the drilling of an exploration well in 2013."
(Source: Sterling Energy)
(Picture: Surface Oil Seeping from ground at Sangaw North Block)
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