clarification for vin123

vin

Here is the text of the reply email I got from Neil.


Yes that is correct - should OBL declare Backreef-1 a Discovery under strict PRMS SPE Guidelines under the Backreef Play Agreement, Buru has 90 days to elect to convert their back-in option. If they elect to backin - OBL is on title as to 70%, remains operator, is cashed up and has no obligation to drill a second well by 31 October 2012. Further, once OBL declares a Discovery, even if Buru elects not to back-in; the farmin is deemed complete, OBL goes on title on a new licence as to 100%and no second well is required. If no discovery is declared - OBL has the right but not the obligation to drill the second well by 31 October 2012 - but should this well be drilled and a discovery is made - Buru has no further rights to backin and OBL has rights to the new title over the entire area as to 100%.