The Hindu Business Line : Canoro Resources to farm out interest to Brownstone Ventures

Canoro Resources Ltd plans to farm out 15 per cent participating interest to Brownstone Ventures Inc in two oil and gas exploration blocks AA-ON-07 and AA-ONN 2003/02 in the Assam Arakan basin.

Both the Canadian companies have entered into a letter of intent in this regard.

According to a Canoro press release, both the companies have also agreed to work together on future opportunities in India for next three years. The transaction is expected to benefit Canoro's ongoing development programme in Amguri field — also in Assam-Arakan basin — and Canoro's interests in securing more oil and gas blocks through NELP-VI.

Canoro currently holds 65 per cent operating stake in AA-ON-07. Kolkata-based Assam Company has 35 per cent participatory interest in the nomination block.

AA-ONN 2003/02 is an NELP block held jointly by Canoro (30 per cent), power major NTPC (40 per cent) and Geopetrol International Inc of France (30 per cent). Geopetrol is the operator of the block.

Brownstone is an investment company having direct interest in oil and natural gas sector. The company will pay $2 million to Canoro for the 15 per cent participatory stake. "In addition, Canoro will be issued 4 lakh common shares and 2 lakh options of Brownstone." After the farm-out, which is subject to approval of the partner(s) and the Union Government, Canoro will hold 50 per cent operating interest in AA-ON-07 and 15 per cent non-operating interest in AA-ONN 2003/02.

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