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Re: Form S-1Seismic We intend to use $5.55 million for seismic in Mongolia. In 2011, we anticipate that the seismic program will comprise the acquisition of 833 km of additional 2-D data at a cost of $3.35 million in the first phase. This includes 303 km on Block XIII and 530 km on Block XIV. A second phase of 2-D seismic acquisition in 2011 to 2012 would include a total of 232 km with 138 km on Block XIII and 94 km on Block XIV. Drilling Drilling costs primarily consist of mobilization, well heads, operational costs of the drilling crew and rental of drill rig as well as supporting material. We are currently in negotiations with three rig providers. Maximum Offering We intend to use $12.26 million for drilling in Mongolia, allowing us to complete one of the two production sharing contract commitments (three exploration wells). The drilling prospects have not been determined yet. Minimum Offering We intend to use $6.40 million for drilling in Mongolia, allowing us to complete one exploration well in one of our blocks in Mongolia. The drilling prospects have not been determined yet. Geological and Geophysical Some of the proceeds are intended to be used for geological and geophysical campaign including seismic processing and interpretation. Maximum Offering $450,000 is intended to be used in Mongolia for geological surveys, field work, data processing, mapping conducted through the office in Mongolia which is planned to be registered and for independent technical and environmental reports. Minimum Offering $250,000 is intended to be used in Mongolia for geological surveys, field work, data processing, mapping conducted through the office in Mongolia which is planned to be registered and for independent technical and environmental reports. 26 Production Sharing Contract Costs Production sharing contract costs include environmental and educational costs. Maximum Offering We intend to use $1.24 million for costs related to environmental and education purposes. Minimum Offering We intend to use $1.86 million for costs related to environmental and education purposes. Working Capital Cash funds which are planned to be used within 3 months will be held on our fiduciary call bank account to which we have access within 24 hours. We plan to invest funds that we believe will be needed within the next three to 12 months in highly rated (AA or more) and liquid interest-bearing government securities, and we plan to invest funds that we believe will not be needed during the next 12 months in highly rated (AA or more) and liquid interest bearing government or corporate securities. In general, the investment policy that we propose to follow is intended to secure the amount of the funds. The supervision of the investment of these funds is planned to be provided by Peter-Mark Vogel, our President and Chief Executive Officer and Ari Muljana, our Chief Financial Officer. Due to the nature of the oil and gas industry, budgets are regularly reviewed in light of the success of the expenditures and other opportunities which may become available to us. In addition, our ability to carry out operations will depend upon the decisions of other venture partners. Accordingly, while we intend to spend funds available as stated above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary. Also, if we require funds in excess of the amounts raised in this offering, we may consider opportunities to partner with third parties at a project level. For our business objectives that we expect to accomplish using the net proceeds of this offering, see “Description of Business.” Any proceeds received from exercise of the warrants issued to Raymond James Ltd. as compensation and exercise of the over-allotment option will be used to provide general working capital to fund ongoing operations. |
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Msg # | Subject | Author | Recs | Date Posted |
2255 | Re: Form S-1 | tracerfan | 1 | 2/2/2011 7:22:16 PM |