agm 2013 vote pope, page-87

Ozgem,

Not necessarily whole tenements being handed back.

Under SC conditions, various parcels of a tenement are required to be relinquished at certain times along the term of the lease.
IE, relinquish 20% of say SC63 in Phase X, and NDO would hand back the 20% they considered the most expected unproductive part of that SC.

Having said that, I cannot see them giving PNOC-EC the nod on entering a commitment to drill in SC58. The commitment to enter a drilling phase in SC58 is required to be delivered by or before 30 June 2013...that's only 13 to 14 weeks away.

Moreover, if they do commit to enter a drilling phase here, the first well has to be drilled by Feb 2014, and NDO have to carry the full cost of the well to earn their farmin.

I cannot see them getting a major to farmin within the next 14 weeks, and I can't see them speculating that they'll be able to pay for a US$70M deep water well by themselves...even at the US$40M they quote for the well, it's beyond them without a major.

So, I expect them to relinquish SC58, and it could be as early as June.

SC63 is another fish...drilling costs here cheap (JU depth), and they only have to pay half.

SC63 commitment well by November 2013...they have time to wait for the result of the Galoc Nth drill...success here could mean they are able to fund (one way or another) their half of the SC63 well.