RNS19 Apr 2018 09:13
RNS Number : 4308L
Red Emperor Resources NL
19 April 2018
19 April 2018
Red Emperor Resources NL ("Red Emperor")
SUCESSFUL TRANSFER OF PARTICIPATING INTERESTS UNDER SERVICE CONTRACT NO. 55 (SC55)
The Board of Red Emperor Resources NL ("Red Emperor" or the "Company") is pleased to provide the following update with respect to Service Contract 55 (SC55), offshore Palawan Basin in the Philippines.
This week the Company finally received official confirmation from the Philippine Department of Energy (DoE) ratifying the request for the transfer of participating interests in Service Contract no. 55 (SC55) from Otto Energy Limited (ASX: OEL) to its partners, Century Red Pte. Ltd (a 100% owned subsidiary of Red Emperor Resources NL), PaIawan55 Exploration & Production Corporation and Pryce Gases, Inc.
Red Emperor's equity interest in Block SC 55 is now 37.5% (previously 15%) after the DoE found the partners to be "Financially qualified to assume the proposed interests. Legally qualified to assume the participating interest from Otto Energy considering that they are existing petroleum companies operating either as operator and/or consortium members in petroleum service contracts; And technically qualified, as exemplified by the joint cooperation and completion of previous exploration activities, such as the drilled Hawkeye-1 well."
As a result, the participating interests in SC55 are as follows:
Company Participating Interests
Palawan55 Exploration & Production Corporation (Operator) 37.50%
Century Red Pte. Ltd (Red Emperor Resources) 37.50%
Pryce Gases, Inc. 25.00%
Total 100%
It is also understood that Palawan55 Exploration & Production Corporation will be the "Operator" of SC 55 as endorsed by the other remaining partners.
Likewise, the timeline for the moratorium period and Sub-Phase (SF) 5 has now been revised to reflect the transfer of interest. It is understood that the minimum work program and budget for the moratorium period and SF 5 are unaffected by the transfer of interest, as shown below:
Sub-Phase (SP) Work Program and Budget (WP&B)
Moratorium Period
(Date of approval of transfer until 13 months thereafter)
Conduct a Qualitative Interpretation (QI) study of the greater Hawkeye area, lithology and petrophysical modeling and a contingent program of AVO studies = US$ 478,750
SP5
(date of end of moratorium period until 12 months thereafter) Drill one (1) Ultra-deepwater well = US$ 3,000,000.00
As nominated "Operator" Palawan55 has suggested that partners hold an Operating Committee Meeting to formalise their appointment as successor Operator, establish an Operating Committee and agree on related amendments to the JOA.
With respect to the committed work program, Palawan55 are currently conducting an inventory of the technical data