Sprint Could Enter Russian Licence Through Terra Stake

Sprint Energy may enter Russian oil and gas licence Block 95-3 in the Nyurol Basin in the Tomsk Region through the acquisition of a 75 per cent stake in company Terra Limited.

The company announced today that it had entered into an option agreement with Terra, during which it will enter into a due diligence period of sixty days. Following this period of due diligence, Sprint will have the option to take a stake in Terra through a formal purchase agreement. Should this purchase agreement go ahead, Sprint Energy will pay $300,000 (USD) to acquire the stake in Terra Limited.

Once this stake is paid, Sprint will then have six months in which to spend $1.2 million to earn a 25 per cent stake of Block 95-3 by funding drilling and access activities on the project. After this, the company will then have 12 months in which to spend an additional $10 million to fund drilling and exploration activities on the block. This will earn Sprint up to 55 per cent of a stake in the project.

The company's next step then will be to acquire 75 per cent of the licence over a 12 month period, by spending another $10 million on drilling and exploration activities during Stage 3 of the project.

Three wells have previously been drilled on the block during the Soviet era. Sprint says it believes current production potential from Well No. 1 could be ramped up from 70/80 barrels per day, with minimal expenditure, to full production of 150/200 barrels per day by early 2013.