Ann: Zhao Dong Block Acreage Increase and Term Ex, page-3

re: Ann: Zhao Dong Block Acreage Increase and... Not 100% sure, but I assume Roc gets the extra acreage for nothing, but carry the exploration costs (80:20). If there is a commercial discovery PetroChina have the option of getting 51% of it all, reducing Roc to owning 80% of 46% (ie 39.2%). I assume all development costs (and profits) are then shared (Roc at 39.2%).

This is the price Roc pays for the extra acreage, which is all owned by China I assume. No risk to PetroChina (the State run enterprise) - they get the exploration done for nothing. Not a bad deal for Roc if there is oil there, but they carry most of the exploration risk.