Tethys Oil has signed a Letter of Intent with Star Energy Group plc for Star Energy to become a 20% partner in Tethys operated licenses 1/02, onshore Zealand and 1/03 onshore and offshore Jutland and Zealand in Denmark. License 1/02 contains the Karlebo prospect where an exploration well is scheduled to be drilled in early fall.
The farmout arrangement calls for Star Energy to pay 20% of historical costs and 40% of the cost of an exploration well on licence 1/02 for its 20% interest in the licenses. The total cash value is estimated at approximately MSEK 13 (MGBP 1, MUSD 1.8) including the cost for the exploration well. Through the farmout, Tethys will reduce its interest in the licenses from 70% to 50%.
