for the downrampers, page-5

Hi Gerkin,
Hopefully they have more ground 'on trend' of the major oil and gas production corridor within the Austin Chalk. There is also a substantial gas play going on in the Austin Chalk closer to the Gulf.

Anyways, the announcement regarding farmout completion on the 30/4/2010 is definitely worth a look.

If you have any thoughts on what precisely this section means I would appreciate it.

"Under the terms of the farm out agreement, Pryme will receive a cash payment of US$500,000 and a free carry on the first two wells drilled within the project area. The carry consists of a 25% back in after payout on the initial well and a 25% carry through to production on the second well proportionate to Pryme?s interest being farmed out (4% net carry to Pryme.) There are a number of Austin Chalk well locations within the project area and the parties will bear the costs of the third and subsequent wells in proportion to their working interests.
Based on analogous reservoirs and production from the Austin Chalk within the region of the project, initial production rates from a successful horizontal well are estimated to be between 1,500 and 3,000 barrels of oil per day (BOPD) with potential reservoir capacity in the range of 750,000 to 1,500,000 barrels of oil recoverable per well."


Originally I thought that PYM were free carried for the first two drills and production facilities, but I'm certain that this cannot be the case after looking at the last quarterly and seeing their exploration costs!

Cheers,
turtle