Ann: Turkey Drilling Program Update , page-15

Commercial Terms in Turkey

Royalties are 12.5% and corporate income tax is 20%. Licenses have a four-year term. If a well has not been drilled by the end of the third year, a bond of $50,000 must be posted to extend the license. If the Company drills in the fourth year, the bond is returned. If not, the bond is forfeited. License awards are based upon a committed work program that may involve some or all of geological and geophysical work, seismic reprocessing and interpretation, and contingent shooting of seismic and drilling.

Licensing Regime

The licensing process in Turkey for oil & gas concessions occurs in three stages: permit, license, and lease. Under a permit, the Government grants the non-exclusive right to conduct geological investigation over an area. The size and term of the permit are subject to discretion of the General Directorate of Petroleum Affairs ("GDPA"), the regulator of oil & gas activities under the Ministry of Energy and Natural Resources.

A license grants exclusive rights for petroleum exploration. A license has a term of four years and requires drilling activities in the third year. This obligation may be deferred into a future year by posting a cash bond. After the initial four years, the license may be extended for up to two, two-year extensions. No single company may own more than eight licenses within a district. Rentals are due annually based on hectares under license.

Upon a discovery on a license, the license holder applies to convert the productive area to a lease, not to exceed 25,000 hectares. Under both a license and a lease, the lessee may produce oil & gas. The term of a lease is for 20 years. Annual rentals are due based on hectares under lease.


At this stage, Edirne is still a licence category, and I don't know whether the operator has applied for conversion to lease status or not...with the discoveries and development in the licence, the chances are, they have.

It is very interesting that the area containing Yolboyu-1 is scheduled for a 3D shoot this yr, yet they have decided to drill ahead of 3D...take from that what you will.

Can't believe I missed the TD for Yolboyu-1 in that release yesterday...they say everybody is entitled to a "doh" moment once a day...must try and keep it to one!