(Alliance News) - Synergia Energy Ltd Monday said it had agreed a head-of-terms deal for its farm-out agreement in the Cambay Field.
The India and UK-focused gas production and carbon capture and storage project development company currently owns a 100% working interest in the Cambay field in Gujarat state.
The joint venture between Synergia and an unnamed Indian operating company acting as farminee will facilitate the full development of the field. The farminee has been granted 90 days in which to finalise the farm-out and joint operating agreements. Subsequently, a request will be made to Indian government for the transfer of a 50% working interest in Cambay to the farminee.
"In exchange for the transfer of a 50% working interest in the Cambay PSC, the farminee would carry Synergia for the full cost of the agreed work programme which is to focus on the Eocene gas reservoir and which is to be completed within 12 months from the date of the [government of India] approval. The Cambay field would be under joint operatorship by Synergia and the farminee, with the farminee acting as lead operator," Synergia said.
Following governmental approval, the company said that a lumpsum would be paid to Synergia by the farminee in recognition of past costs.
Synergia also confirmed that the jet pump installation on the Cambay C-77H well "continues to work reliably." Production for the month of November averaged 142,000 standard cubic feet per day and five barrels per day condensate. The well also produced around 15-20 barrels of water. However, a recent echometer survey revealed a water influx, believed to be the fault of the field's legacy fracked zones 1-4.
"Mitigation alternatives are being studied, including the re-installation of the bridge plug to isolate frac zones 1-4," Synergia said.
Synergia Chief Executive Officer Roland Wessel said: "We are confident of the synergy and alignment of objectives with the farminee company and look forward to the accelerated development of the Cambay field which is the primary objective for the joint venture."
Synergia shares were up 0.5% at 0.080 pence each in London on Monday morning.
By Hugh Cameron, Alliance News reporter
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