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Fortune sees return of capital from Zydeco
HOUSTON, June 6 (Reuter) - Fortune Petroleum Corp (FPX) said Friday it has exercised its right under the exploration agreement with Zydeco Energy Inc (
ZNRG) to have unexpended capital contributions returned to Fortune.
It also said the two companies entered into a letter of intent to farm out South Timbalier Block 47 to a private operating company in the Houston area. That
proposed farmee of the Mentor Prospect will have about 60 days to acquire and interpret 3-D seismic and propose a well on the acreage or relinquish any rights to
the farmout.
The letter of intent provides for both Fortune and Zydeco to retain a working interest in the prospect.
Fortune said it and Zydeco have also received a proposal from a third party to sell their interest in their Everest Prospect for a cash payment of $75,000 and the
retention of a 5 percent overriding royalty.
Under the terms of the companies' exploration agreement, signed Feb. 13, 1995, Fortune said, it has contributed $4.8 million for the leasing of acreage, the
payment of lease rentals, the acquisition and processing of seismic data and other related expenses for leads and prospects developed by Zydeco in the Transition
Zone and Timbalier Trench areas of offshore Louisiana.
Of that total, about $2,238,000 remained unspent at March 31, Fortune said.
Zydeco is required to return the balance after setting up a reserve for expenses that may have been incurred prior to the time of Fortune's election, the company
explained.
Fortune said it will retain its undivided 50 percent working interest in each of the exploration prospects subject to the agreement, subject to possible proportionate
reduction in certain circumstances.
Fortune said it is confident the two companies will ultimately drill several of these projects.
More news for referenced ticker symbols: FPX, ZNRG, and related industries: oil/energy. |
