The terms of the farm-in are that Gals-K will invest approximately $3 million in the Bugruvativske field over the course of the next 12 months in order to drill two new wells and they will bear the financial risk under the JIPA during this period.
The revised JIPA provides that (assuming LVR matches Gals-K's initial expenditure) the financing risk shall be shared between LVR and a subsidiary of Gals-K, IPEC.
Negotiations are currently focussed on the nature of the initial work programme to be carried out under the JIPA
, what contributions, and in what form these contributions will come from the parties to the JIPA
Access to the contractual production entitlement is subject to CanArgo and Ukrnafta financing their proportional shares of the JIPA
expenditure, with Ukrnafta's contribution expected to be in the form of existing wells and field installations whereas CanArgo's contribution is planned to be in cash and services.
The campaign, developed by JIPA
in cooperation with the National Library and KACIP, seeks to raise awareness about intellectual property and help the general public and business community understand the importance of IPR to the well-being of the economy, as well as the legal implications of purchasing pirated material.
Under the terms of the JIPA
, CanArgo would be entitled to its contractual share of production above an agreed base line production level, which is currently 1,300 bopd and which decreases over time.
Under the terms of the JIPA and associated work programmes, it would be planned to significantly increase production from the Field by investment in both remedial workover activity and potential infill drilling, horizontal drilling and pressure maintenance utilising appropriate technologies.
CanArgo's plans for LVR (which will be operated as a CanArgo subsidiary) include a rapid investment of funds into the Field in order to establish production to the JIPA at the earliest possible opportunity, which CanArgo believes should add significantly to its production and cash flow within the next twelve months.