Niko Resources announced the signing of a Heads of Agreement whereby it will farm-in to a production sharing contract (PSC) offshore Madagascar. Niko will become the operator of the Grand Prix PSC currently held by privately owned EnerMad Corporation.
Under terms of the agreement, Niko will earn a 75% interest by funding a 3,000 square kilometer 3-D seismic program and the drilling of up to two exploration wells.
The agreement is subject to the execution of definitive agreements and the approval of the Office of National Mines and Strategic Industries who act on behalf of the Republic of Madagascar. The PSC was signed effective November 26, 2007.
The PSC covers 16,845 square kilometers in water depths ranging from shallow water to 1,500m. The block is located down dip of a multi billion barrel oil deposit currently being developed. The block has multiple play types which will be targeted by the 3D seismic and the drilling programs covering Triassic, Jurassic, Cretaceous and Tertiary geologic ages. The joint venture is currently reprocessing 7,600 kilometers of 2D seismic to be followed by the 3,000 square kilometer 3D seismic program planned to commence in the first quarter of 2009.
