Oil and gas exploration company Adira Energy has entered a series of agreements to farm out part of its interest in the Yitzhak licence, offshore Israel.
Adira Energy, through its wholly owned subsidiary Adira Energy Israel, agreed to farm out a 5% working interest in the licence to the AGR Group.
Under the terms of the deal, AGR will pay Adira a 3% overriding royalty interest on AGR’s share of revenues from petroleum sales; this interest will increase to 4.5% until AGR’s expenditures have been repaid.
Adira also entered an agreement with Ellomay Oil and Gas 2011 to farm out a 20% working interest in the Yitzhak licence.
Ellomay will reimburse Adira for its proportionate share of the costs to the date of closing, as well as interest at LIBOR +1%.
In addition, Adira has formalised a letter of intent with Brownstone Energy regarding the Yitzhak licence, enabling the formal registration of Brownstone’s 15% working interest in the Petroleum Registry.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The Yitzhak licence covers an area of 127.7km2 in shallow water at depths of 60-250m.
The agreements will reduce the company’s working interest from 85% to 60%, and strengthen its operating and business profile in the licence.
The farm-out will make AGR the lead operator of the licence, with Adira as a cooperator, pursuant to the agreement.
The licence owners will negotiate a joint operator agreement to regulate the commercial relationship.