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About this update from Red Rock Resources Plc
[{"type":"text","content":"\n \nRNS Number : 3523M Red Rock Resources plc 20 January 2016 \n\nRed Rock Resources Plc\n(\"Red Rock\" or the \"Company\")\nAcquisition of Interest in LM20 Well at Shoats Creek \n \n20 January 2016\nRed Rock Resources plc announces, further to its announcements of 28 October 2015 and 27 November 2015, that its wholly owned subsidiary Red Rock Resources, Inc. (\"RRR\") has agreed with Shoats Creek Development Corporation Inc. (\"SCDI\"), to acquire a 20% Working Interest (\"WI\") in the Lutcher More 20 (\"LM20\") well at the Shoats Creek Field, Beauregard Parish, Louisiana. The LM20 produced 24 hour test results of 260 barrels of oil and 500 mcf of natural gas per day (or 340 barrels of oil equivalent per day) as announced by Northcote Energy Ltd on 1 September 2015. \n \nRRR previously entered into an agreement to participate in development activities at the Shoats Creek Field, notably the planned LM 21 and LM 22 wells, and has now agreed to acquire an equal interest in the recently drilled LM20 well (together the \"Project Wells\"). \n \nRed Rock acquires a 20% WI and 14.4% net revenue interest (\"NRI\") in the LM20 well for an immediate payment of US$120,000. RRR has also executed a 4.5% promissory note for US$80,000 payable in equal monthly instalments between July 2016 and December 2018. In the event of cumulative production from the LM20 well exceeding 100,000 barrels of oil within three years, a further payment of US$40,000 will become due.\n \nOther Terms:\n \nSCDI will have a 18.75% back-in after payout on the Project Wells (payout being the time when the Company has received an amount in payments for oil and gas sales minus operating expenses that is equal to the investment required to drill the Project Wells and associated facilities) so that thereafter this percentage of the Company's working interest would revert to SCDI, and Red Rock would be left with a 16.25% WI/11.7% NRI. \n \nAs part of the investment additional wells and re-entry opportunities may from time to time be proposed in the project area with the Company having the option but not the obligation to participate on a 'heads-up' (i.e. equal and without back-in) basis to other participants. \n \nOperations Update:\n \nThe Company in its announcement of 27 November 2015 noted...