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Sanjawi Convertible Carried Working Interest
The Company holds a 2.5% working interest on oil and gas production from all acreage in Sanjawi Block No. 3068-2, Zone II, Baluchistan Province, Pakistan. The working interest is “carried” (i.e. free of exploration and development costs) as to the initial two 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 theparticular 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.
Sanjawi exploration license covers an area of 2,258 square kilometers and encompasses a variety of terrains ranging from relatively flat and cultivated valley floors to rugged hill country. The block is considered highly prospective due to the presence of oil seeps to the south of the lease. The block is dominated by a series of east-west trending surface features including the Dabbar and Warken Shah anticlines. They are large structures, the Dabbar anticline being some 300 square kilometers in area, and these features are currently being examined by Heritage Oil and Gas Ltd as potential targets for drilling. The presence of these surface structures gives encouragement that similar features may be present at depth. Initial interpretation of seismic has identified several prospects and leads.
An exploration drilling program is planned for 2010 by Heritage Oil and Gas Ltd.