Sonoro Energy Ltd. ("Sonoro" or "the Company") (TSXV:SNV.V) is pleased to announce that its wholly owned subsidiary, Sonoro Energy Iraq B.V. ("Sonoro Iraq"), and its partner, Berkeley Petroleum Mesopotamia Asphalts Limited (together, the "Licensee"), have signed an Asphalt License Agreement (the "Agreement") with the Al-Salah ad Din Provincial Government in the Republic of Iraq. The Salah ad Din Province lies just to the North of Baghdad and lies within the trend of mega oilfields including production of roughly 300,000 barrels oil equivalent per day. It is estimated that Iraq may hold the world's fourth largest heavy oil resources behind Canada, Venezuela and Russia. The key terms of the Agreement are the following:
- Sonoro Iraq will have a 70% working interest and will be the operatorand Berkeley will have a 30% working interest.- Licensee has the exclusive rights to explore, develop and produceasphalts and related organics within the entire Al-Salah ad DinProvince and to sell the asphalts and its related organics produced(and/or the by-products after processing) domestically and/orinternationally.- The Agreement provides for an initial exploration period of 5 yearsand is followed by a 30 year exploitation period with extensions forany carved out exploitation areas to develop asphalts and relatedorganics.- Licensee has the right to construct and operate asphalt-heavy oiltopping facilities within the Al-Salah ad Din Province, with certainprocessing capacity commitments.- Licensee is entitled to 50% of the revenues from the sales of asphaltsand related organics (and its by-products after processing), after taxand after cost recovery.- 80% of the revenues are available for cost recovery. Licensee iscommitted to a minimum initial investment commitment of US$1.5million.
The Al-Salah ad Din Provincial Government has obtained the necessary Provincial and Central Government Ministry approvals to grant these rights under the Agreement.
Sonoro Iraq and Berkeley entered into an agreement whereby Sonoro Iraq has a 70% working interest and operatorship, while Berkeley retains a 30% working interest which is carried by Sonoro Iraq for the initial facility and exploration operations.
Sonoro Iraq obtained its interest in the License through Berkeley, and accordingly is paying Berkeley a US$250,000 signing bonus and issuing 23.75 million shares in Sonoro Energy Ltd. at a deemed price of $0.38 per share. Berkeley will also have a carried interest on exploration expenses, while Sonoro Iraq will have a preferential entitlement to recover its expenses before Berkeley can receive income on their equity interests in the project. In addition, Sonoro Iraq obtained further preferential rights from Berkeley and its affiliates to pursue similar asphalt opportunities in the Republic of Iraq as well as preferential rights to participate in at least one other conventional petroleum exploration and or development project Berkeley is currently pursuing within the petroleum sector in Iraq.