Shemen Oil and Gas Resources Ltd. (TASE: SOG) has sold a 5% of the rights in the Shemen offshore oil and gas exploration license to the well operator, Azerbaijan's Caspian Drilling Company Ltd. (CDC), in exchange for bearing 5% of the license's Yam 3 well's operating costs. CDC's investment for the well will total $6 million under the well's approved budget.
From the date of the closing of the deal, CDC will bear 5% of Yam 3's operating expenses under the work plan and joint operating agreement. If a commercial discovery is announced at the well, CDC will pay Shemen Oil $2 million within 60 days of the start of the license's development.
The sale is subject to approval by the Petroleum Commissioner.
Following the sale, Shemen Oil owns 79.16% of the license, CDC owns 10%, Zerah Oil And Gas Explorations LP (TASE: ZRAH) owns 7.5%, and Zmiha Investment House Ltd. (TASE: TZMI) owns 3.34%.
Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2013
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