Sterling currently holds a 100% interest in, and is the operator of, the PSC.
Under the terms of the farmout agreement, Pura Vida will on completion, assume a 50% interest in the PSC, pay Sterling US$1.25m towards Sterling’s past costs, and pay all costs associated with the acquisition of 1,000km of 2D seismic, and 1,250km² of 3D seismic up to a maximum cost of $15m.
The PSC, awarded in 2004, is currently in Phase 2 of the Exploration Period, Presidential approval was recently granted to extend the current phase to September 2015. There are no outstanding work commitments in Phase 2.
The PSC covers approximately 17,650 sq. km of the Ambilobe Basin, a large under-explored area offshore north-west Madagascar where both Cretaceous and Tertiary leads have been identified.
The proposed seismic programme aims to mature the best leads to one or more drill ready prospects prior to the expiry of Phase 2 as Phase 3, if entered, has a commitment to drill an exploration well.
Sterling Energy executive chairman Alastair Beardsall said, "The Ambilobe area is considered to be highly prospective, but remains largely unexplored; the proposed seismic programme facilitated by the farmout will allow the partners to further investigate the potential of the Ambilobe Basin at no cost to Sterling."
