Iraq: Niko notes relinquishment of Qara Dagh block

Canadian companies that held interests in the Qara Dagh block in Iraq’s Kurdistan region relinquished the block in late 2012.

The companies in November 2012 entered into an agreement with the Kurdistan Regional Government to surrender their collective interests. Niko Resources Ltd., which was block operator and held a 49% working interest, recognized a $39 million asset impairment in the first quarter of its fiscal 2013 when it reassessed the recoverable amount of the block exploration and evaluation asset. The relinquishment was in exchange for proceeds equal to the carrying amount of the asset.

Pursuant to the agreement, none of the consortium partners have any future obligations or liabilities with regard to the original production sharing agreement, and Niko expects to recover $15 million.

Besides Niko, interests in the block were Calgary firms Vast Exploration Inc. 25% and Groundstar Resources Ltd. 6%. The KRG had a 20% carried interest.

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