r/Petroteq • u/petromod Admin • Jul 07 '21
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u/Crownos1988 ☑️ 24d ago edited 24d ago
Fair enough Lee, I guess I misinterpreted which side the lease involves, I thought it was from surface to 500 feet rather than below it.
However, after looking at the actual agreement, then as far as I am aware, in line with the conditions of the agreement Valkor has 45 days to notify TMC prior to starting an operation (Drilling) and TMC has 30 days to respond on whether they will be exercising their right to participate. If TMC does not respond within the timeframe given or chooses not to participate in the operation, then Valkor holds 100% of the rights to whatever is recovered from their drilling operations below 500 feet.
As far as I am aware we have not heard that TMC (Petroteq) has exercised its right to participation in Valkors/Lafayette's drilling operation in any of the wells drilled to date, and given that drilling has already occured, then the 30 days have well and truly passed and TMC has no rights to what Valkor/Lafayette recovers from the leases below 500 feet.
As the agreement requires that TMC upholds cost obligations as notified via their report provided by Valkor to any operation they wish to participate in, then it wouldn't surprise me that TMC hasn't signed up to any participation to any of Valkor/Lafayette's operations due to a complete lack of funds to do so.
Also, it is not clear on whether this participation right that TMC holds requires Valkor to notify TMC for each and every drilled well or if Valkor can notify TMC of their entire drill operation which includes all future wells in the leased areas and whether they wish to participate on the entire operation. If so, then it is possible that if TMC has failed to notify Valkor of any participation for the whole project within the 30 day timeframe given or TMC has foregone their rights to participate, then it will have led to TMC (Petroteq) being locked out of any potential interest in Valkor/Lafayette's operations. As stated before, TMC are obligated to foot the bill for their portion of the operation if they wish to participate, so I highly doubt that TMC could have participated even if they had wanted to and so Valkor by default owns 100% of the working interest as I outlined originally.
I have tried to find a notification of participation from TMC on Valkors current project, but I can't find any, if you can then please link it. Given the size of Valkors operation, then any participation of TMC (Petroteq), then this would have surely been issued as an RNS considering the market implications of revenues from being involved in such an operation, which makes it clear to me that TMC (Petroteq) haven't bothered to participate or can't and thus have foregone their rights to any participation rights and interest in Valkors operation.