Taipan Resources Inc. has entered into a non-binding letter of intent (LOI) with Petroleum Exploration Ltd. (PEL) to acquire a 50% interest in PEL's Block 2769-13 (Salam) in the Jacobabad and Ghotki districts of the Sindh Province in Pakistan.
Pursuant to the terms of the LOI, Taipan will acquire the interest in exchange for the issuance of such number of Taipan common shares as is equal to 50% of the outstanding Taipan common shares following completion of the transaction.
Prior to completion of the transaction, Taipan intends to consolidate its outstanding common shares on a 10-for-1 basis. In addition to the consideration shares, Taipan will agree to pay a $1,000,000 discovery fee to PEL within 120 days of a commercial discovery that meets certain agreed to parameters and will pay a $1,000,000 production bonus upon commercial production on the Salam Block.
The Salam Block is situated in the Central Indus Basin and covers an area of 73 square miles (200 square kilometers). It lies between four producing fields: Qadirpur, Khandkhot, Khandkot West, and Badar.