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Sprint Energy has signed a heads of agreement (HOA) with Burtasi Oil through its Australian agents, Petroscope, to acquire up to 70% interest in Burtasi Oil, which is the 100% holder of two prospective licenses called Shatkinsky and Pionersky in the Volga-Urals basin, Penza Region, Russian Federation, according to a news release
The HOA provides for a 90-day exclusivity period to Sprint to conduct its due diligence on the licenses for a non-refundable deposit of US $250,000, followed by signing of phase one formal purchase and joint operating agreement. Under the HOA, Sprint will pay 100% of the cost of the initial geology and geophysics, office costs and administration (as operator), 2D seismic acquisition, processing and interpretation earning a 30% interest in Burtasi Oil.
Sprint (though Burtasi Oil) will operate the licenses and will engage Petroscope Pty Ltd. as its technical team leader and administrators with local Russian management and operational delivery though its office in Penza.
The licenses are current and expire May 1, 2017, with G & G and seismic preceding the drilling phase, although if so warranted, drilling may be brought forward from 2016/17 if the company decides, based on technical merit and outcomes of Phase One work program. By paying 100% of phase two earn in costs through drilling one or two well(s) to an approximate depth of 1850m on the de-risked prospects identified during the first work phase, Sprint will earn an additional 40% interest (total of 70% interest) in Burtasi Oil. If Sprint decides not to proceed to Phase two and the commitment to well(s) is not drilled, Sprint walks away retaining only 30% in Burtasi Oil.
The Shatkinsky and Pionersky licenses contain six structurally mapped prospects on previous soviet era seismic data which are near drill ready subject to de-risking by modern 2D or 3D seismic data acquisition, processing, and interpretation. Based on the current available data, Burtasi Oil have identified a total of 71 MMbbl of original oil in place or 13 MMbbls, P50 indicative recoverable reserves, from the same formations as those currently producing in adjacent oil producing fields in the Carboniferous and Devonian carbonates and such oil fields are less than 6 km from the Burtasi Oil license boundary.
Burtasi Oil, with Sprint at the helm, will remain the operator of Shatkinsky and Pionersky throughout the period in phases and beyond. Burtasi Oil is fully carried throughout the current license term and work programs.