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Wednesday, November 16, 2016
Strata-X Energy has entered into a heads of agreement with Magnum Gas and Power for a staged farm-in to earn up to 75% of Botswana’s Serowe CSG Project. Strata-X will operate the project under the deal.
The Serowe CSG project spans around 273,000 acres in the Kalahari Basin CSG Fairway. The acreage has certified 1075 PJ of recoverable Prospective Resource.
The Heads of Agreement with Magnum contains the key commercial terms of the proposed farm-in. Legally binding long form agreements in respect of the farm-in to the Serowe CSG Project are expected to be finalized and entered into between the parties within the next two weeks. The proposed farm-in consists of three stages and Strata-X has up to three years to complete all stages, with each stage earning the company a 25% working interest in the Serowe CSG Project. The first stage will begin in January 2017 and will involve the desorption analysis of three CSG core wells as required for continued gas resource certification. In addition, one well will be completed and production tested.
Stage 1 is a firm commitment and is estimated to cost A$1.1 million dollars. Stages 2 and 3 are optional and the decision to proceed to these stages will be based on the results of the prior stages. Stages 2 and 3 are estimated to costs approx. A$1.5 million and A$3.5 million, respectively depending on the success of new completion and production methods to be trialed.
The final 25% working interest is earned when 100 PJ of 2P reserves are certified for the project, which is a sufficient quantity of gas for a Gas Sales Agreement (GSA) to supply a 50-MW government owned corporation power station, which may be located near the Serowe CSG Project.
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