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Zamzama North Convertible Carried working Interest
The Company holds a 2.5% working interest on oil and gas production from all acreage in Zamzama North Block No. 2667-8, Zone III, Sindh Province, Pakistan. The working interest is “carried” (i.e. free of exploration and development costs) as to the initial three wells. Additionally, the Company has the option to convert its 2.5% working interest at any time, on a well by well basis, to a 1.5% royalty, free of the costs of exploration and development of the particular well as to which the conversion election is made.
The block is operated by Heritage Oil and Gas Ltd. Other joint venture partners are Hycarbex-American Energy Inc, Sprint Energy and Trakker Energy. Heritage Oil and Gas Ltd is an affiliate of Heritage Oil Plc (www.heritageoilplc.com), an independent oil and gas company which focuses its operations on Africa, the Middle East and Russia. Heritage Oil Plc shares trade on the London Stock Exchange under the symbol HOIL with a secondary listing on the Toronto Stock Exchange under the symbol HOC.
Zamzama North exploration license covers an area of 1,229 square kilometers, located in the south of Pakistan in the western part of the Sindh Province, approximately 200 kilometers north-west of Hyderabad. The block is situated only 10 kilometers from the eastern flanks of the Kirthar Fold Belt and forms part of the associated compressive foreland. The eastern portion of the block is composed of the riverine, rich, flat, low lying and intensively cultivated flood plain of the Southern Indus Basin, whilst the western area is uncultivated and covered by the low, flat, alluvial outwash from the Kirthar Hills. The current seismic database used to map the block comprises some 750 kilometers of fair to good quality recent 2D seismic. Any discovered hydrocarbons could be readily connected to the existing infrastructure as the main Sui-Karachi pipeline is situated only about six kilometers to the east of the block. To the immediate south of this block is the large Zamzama Gas Field operated by BHP Billiton Ltd.
An exploration drilling program is planned for 2010 by Heritage Oil and Gas Ltd.