Carnarvon, Sun Resources ink farm out deal with Siam Moeco

Carnarvon Petroleum and its joint venture (JV) partner Sun Resources has farmed out 100% of the L20/50 concession to Siam Moeco Limited(SML).

SML is planning to aquire 3D seismic data of the concession area next year and to drill in subsequent years. The concession area is located onshore approximately 60km west of its Phetchabun basin in Thailand

Carnarvon and Sun Resources will receive $8.5m on commencement of commercial production and a 2.0% overriding royalty interest over the Concession, amounting to $10m.

Carnarvon is the operator of the l20/50 concession with 55% ownership interest. Carnarvon and Sun Resources now have no further exploration rights in this area.

The farm out agreement has been sought by both the companies as they intended to focus their resources on other activities within their respective businesses.

Siam Moeco’s final investment decision is dependent on commencement of commercial production with the development of the concession area.

It also depends on production from the concession area exceeding 2,000 barrels of oil equivalent per day for a continuous period of 30 days or when cumulative production from the concession area has exceeded 100,000 barrels of oil equivalent.

In related operational updates, Carnarvon petroleum has completed a share purchase plan to raise $5m as part of the company’s $20m capital raising.