...Key aspects of the farm-out are: • The farm-out relates to thirteen licences (out of a total of 31) held by Dart in the U.K. All farmout licences are in England / Wales, in both the western and eastern parts of the Bowland Basin, an area considered highly prospective for unconventional gas. A recent study by the United Kingdom Department of Energy and Climate Change and the British Geological Survey estimates shale gas resource potential in the Bowland Basin ranging between 822 Tcf (low estimate) to 2,281 Tcf (high estimate) with 1,329 Tcf as the best estimate. • Dart is currently the operator of these licences and holds a 100% interest in each. GDF SUEZ E&P UK will acquire a 25% working interest in each licence. Dart will retain a 75% interest and operatorship of each licence. • The licences subject to the GDF SUEZ E&P UK farm-in cover a total area of 1,378km2 (340,510 acres), representing approximately 38% of Dart’s total U.K. acreage. The transaction effectively reduces Dart’s net acreage by approximately 10%. • As consideration for the interest acquired, GDF SUEZ E&P UK will pay to Dart US$12 million in cash, and meet Dart’s 75% share of costs up to US$27 million (as well as meet GDF SUEZ E&P UK’s 25% share). The funding will support an agreed unconventional exploration and appraisal program over a three year period, including drilling up to four shale gas exploration wells in different areas of the Bowland basin and ten Coal Bed Methane (CBM) exploration wells. • The farm-out is subject to customary conditions precedent, including approval of the UK Department of Energy & Climate Control (“DECC”) to the transfer of working interest in the licences to GDF SUEZ E&P UK. • On completion, Dart will have gross acreage of 2,481 km2 in the Bowland basin, and net acreage of 2,047 km2 . Netherland Sewell & Associates Inc (“NSAI”) previously certified 60TCF of shale GIP (best estimate) and 4.56TCF of CBM 3C Contingent Resource across the 13 blocks subject to farm-out. Alongside the farm-out, Dart and GDF SUEZ have established a broader strategic cooperation between the two companies, focussed on unconventional gas activities (and especially shale). This includes provision of various support services from GDF SUEZ and partner company SUEZ Environnement in the field of environmental service and water management, and the sharing of best practice....
DTE Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held