One of the critical bits of what Geobrand2 posted was the little clause that starts "Seller may make its elections with respect to each Test Well separately".
Couple the above with "The Test Well Option Price payable by Seller shall be adjusted downward by an amount equal to the proceeds received by Buyer from sales of hydrocarbons attributable to Seller’s 33.3% interest in such Test Well, from the date of first sales from such Test Well"
This tells me that FPEC would be mad to voluntarily hand agree to backin to the entire thing all at once. They are still entitled to the oil sales revenue retrospectively when they do decide to backin and no poin handing over cash until you absolutely have to if your entitlements are such that you hold a risk free option. Sort of like paying your bills on the due date rather than paying them early.
The big question is how many of the wells are considered "test wells" ? I've assumed its just the first two.
SSN Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
