GulfSlope Energy, Texas South Energy and another, unnamed, partner have decided to extend the term of the letter of intent (LOI) for joint drilling and development of oil & gas prospects in the U.S. Gulf of Mexico.
GulfSlope Energy said on Wednesday that the trio extended the LOI until November 30, 2017, or such later time as they mutually agree.
The two companies signed the initial LOI with an undisclosed firm, only described as a ‘large international oil and gas company,’ in mid-September.
Under the principal commercial terms of the farm-out, the unnamed partner will drill a minimum of three exploratory wells with the option to participate in additional three-well phases on the same basis.
The partner will earn a 75% working interest in each prospect by paying 90% of the exploratory costs and making a cash payment of $1.5 million to be split between GulfSlope and Texas South on a 73%/27% basis.
According to GulfSlope, it will be the initial operator of record and will retain a 20% working interest in the subsalt prospects included in the first phase while Texas South will retain a 5% working interested for the subsalt prospects included in the first phase.
Upon achieving certain milestones, the partner will have the right to purchase up to 20% of the common stock in GulfSlope and Texas South.