PetroSun, Inc announced that a new Farmout Agreement has been reached with Pivot Point Energy, Inc covering approximately 207,663 acres located in the Holbrook Basin of Navajo and Coconino counties. A previous agreement with the Company covering this acreage was dated May 18, 2023 with JAYD Ventures LLC and has been in default and was terminated on April 30, 2024.
The terms and conditions of the Pivot Point Energy Farmout Agreement provides PetroSun with a $2,500,000 leasehold fee payable on or before June 12, 2024, a drilling commitment of two test wells based on seismic and a carried twenty-five percent working interest on the two test wells and the initial three development wells.
Pivot Point Energy will receive a seventy-five percent working interest participation covering the approximately 207,663 acres, a three-year extension of the base lease that is payable by PetroSun from the leasehold fee and an Area of Mutual Interest (AMI) that extends three miles from any lease line.
The primary resource target on the North and South Winslow 207,663-acre farmout will be helium from multiple formations down to basement.
The secondary resource targets are oil from the Permian Fort Apache and natural gas from the Devonian that were encountered in the 26-1 well tested by a PetroSun subsidiary near the North and South Winslow leasehold.
After the receipt of the leasehold fee, seismic lines will be shot to develop the initial test well locations for the exploration program.
"The proceeds from the original Farmout Agreement were designated to retire the corporate debt of the Company and advance its Holbrook Basin helium program. The new Farmout Agreement will now allow the Company to achieve those goals. In my opinion and that of other contributing petroleum geologists during the past 25 years, the Central Holbrook Basin and the North and South Winslow areas in the western portion of the basin have always held the most promise for large accumulations of helium. It has been PetroSun that has controlled these areas during that timeframe, limiting helium exploration to other parts of the Holbrook Basin by several qualified operators. It is now the time to see what the Holbrook Basin has been concealing," stated Gordon LeBlanc, Jr, Executive Chairman, CEO and President.