Sprint Enter Volga-Ural Through Burtasi Oil

Australian-listed Sprint Energy has said today that it will acquire up to a 70 per cent stake in two Volga-Ural oil and gas fields through an agreement with Burtasi Oil.

The Heads of Agreement (HOA) deal with Burtasi sees Sprint take an interest in the Russian Shatkinsky and Pionersky oil and gas licenses. Sprint will purchase up to a 70 per cent stake in the fields, it said today, in which Burtasi currently holds a 100 per cent operatorship stake.

Sprint will first have a 90-day exclusivity period during which it will conduct its due diligence on the licenses. This exclusivity period is undertaken at a cost of a non-refundable deposit of $250,000 (USD). This 90-day period will be immediately followed by the signing of a Phase one formal purchase and joint operating agreement, Sprint says. Sprint will take over as operator of the licences.

In addition to the deposit paid, Sprint will also entirely fund the initial costs of the operation on both fields, including the geology and geophysics work, office and administration costs, 2D seismic acquisition, processing and interpretation. In turn, Sprint will take a 30 per cent in Burtasi Oil.

When Sprint enters Phase two of the deal, it will drill one or two wells, paying 100 per cent of the earn in costs. The wells will be drilled to an approximate depth of 1850metres. Should Sprint proceed to this second phase of operations, it will take an additional 40 per cent interest in Burtasi; if Phase two does not go ahead, Sprint will retain its 30 per cent interest in Burtasi Oil attained in Phase one.

Sprint said in a statement today that the deal would see it attain its goal to enter the Volga-Ural region of Russia.

"The ability to earn in to Burtasi Oil (holder of the Shatkinsky and Pionersky Licenses) is an important opportunity for the company and demonstrates the company’s ability to attract significant projects and deal flow in this region," MD of Sprint Brad Boyle said.