BHP will increase its interest to 51% from the 40% announced initially. Falklands Oil & Gas Limited (FOGL) is to retain a substantial stake in the licenses and BHP will pay FOGL an additional $2.75 million in reimbursement of historical costs.
Under the terms of the farm-out agreement, BHP had the option to further increase its interest in the licenses. The company has decided to exercise this option by increasing its interest to 51%.
Consequently, it will pay four thirds of 51% (approximately 68%) of the costs of the near-term work program, including the drilling of two exploration wells and all other associated work to the completion of the drilling work.
Tim Bushell, CEO of FOGL, said: BHP Billiton’s decision to increase its interests in our licenses further confirms our view that the south and east Falkland basins are highly prospective and have the potential for the discovery of significant volumes of oil and gas.
