(MENAFN - ProactiveInvestors - Australia) ADX Energy (ASX: ADX) has entered an agreement to farm out a 10% participating interest in its Chorbane exploration permit, onshore Tunisia, to Gulfsands Petroleum (AIM: GPX).
Under the terms of the farm out ADX will receive a cash payment of US100,000 and funding of up to US600,000 for ADX's share of a planned US2 million seismic program to be carried out on the Chorbane permit.
Following completion of the farm out, Gulfsands will become operator of the Chorbane joint venture and ADX will retain a 30% interest in the Chorbane permit.
The farm out is subject to various regulatory approvals that are expected to be received in the coming months.
This transaction is in line with ADX's strategy of focusing its activities and its resources onshore Romania, offshore Tunisia in the Sicily Channel and central Europe.
Gulfsands Petroleum is an independent oil and gas exploration and production company.
The group's major focus is on the Middle East and North Africa where it has oil exploration, production and development projects in the Syrian Arab Republic, and oil exploration projects in Tunisia.
Gulfsands also produces oil and gas from a portfolio of properties in the U.S., offshore Gulf of Mexico.
Today's news of a farm out deal with Gulfsands Petroleum provides ADX with a carry through to a seismic acquisition campaign next year.
This is the first of two planned farm outs in relation to the Chorbane permit, with the transactions to provide the company with a material source of funding.
ADX's focus of exploration at Chorbane has shifted to the east, which is on trend with producing oil and gas fields.
The prospects being matured are significantly lower risk than Sidi Dhaher in relation to oil and gas charge and some of them also offer large prospective resource potential.
One prospect has emerged as the most likely candidate to be covered by further seismic and may potentially be the target for exploration drilling, which is expected by 2014.