Rocksource is in an advanced stage of negotiations to complete a farm-in agreement with ONGC for a 10% equity stake in exploration block CY DWN 2001/1 on the Indian Shelf. Both companies have Board approval of the main commercial terms and structure of the deal, and are committed to using best endeavours to complete the final administrative tasks required to finalise the agreement. The farm-in negotiation is a result of the MOU signed between ONGC and Rocksource on 23 January 2008.
Block CY DWN 2001/1 covers approximately 12500 sq km of the Cauvery Basin, offshore south east India. This area is equivalent to 30 offshore blocks in Norway. The block is currently in Phase 1 with a 3 well work programme. Further details of the terms of the agreement will be disclosed pending the final completion of the agreement.
On completion, ONGC will be the licence operator and will hold 45% equity, Oil India holds 20% with Petrobras holding 25% from an agreement signed in October 2007, and Rocksource 10%.
Rocksource has completed an evaluation of the CSEM data on the block, which suggests the primary prospect chance of success has risen to in excess of 60% based upon an integrated CSEM-, geological- and geophysical evaluation.
We consider India to be a world class exploration province with excellent opportunities for us to apply our technology and skills. A vital part of the Rocksource strategy is to accelerate growth through strategic partnerships with larger companies that share Rocksource's approach to exploration technology. Rocksource is very pleased to work with an established major oil company such as ONGC.
Completion of such a farm-in agreement will give Rocksource a possibility to participate in an EM-based well in 2008, and provides Rocksource with an excellent start in building a long term business in India.
Due to the release of unverified information related to the company on an Indian website, there was imposed a matching halt on trading in the stock on Friday 1 August in expectation of a release by the company.
