On December 6, 2016 Blue Sky Energy Inc. (the "Company" or "BSI") announced that it had acquired 100% of the outstanding shares of Sonoro Energy Iraq B.V. which holds the Salah ad Din License Agreement which had been in Force Majeure since July 2014. With the Company's significant experience and track record in Iraq and the Middle East, and a continually improving security situation in Iraq, the Company believes it can move forward its petroleum projects and bring benefit and future value to the Company shareholders, and the people of Salah ad Din and Iraq.
Sonoro Energy License
The Salah ad Din License with the Provincial Government secures the exclusive right to the Company to explore for bitumen and produce asphalt (both referred to as “ghir” in Iraq) in the Province of Salah ad DIn. The areas of the License is approximately 24,000 km2 (approximately six million acres) and is situated within the Tigris River Valley, between the Western Desert and the foothills of the Zagros fold and thrust belt.
The Key terms of the License are the following:
- The exclusive rights to explore, develop and produce asphalt/bitumen within the Salah ad Din Province and to sell the asphalt/bitumen produced (and/or the by-products after processing) domestically and/or internationally;
- The Company’s subsidiary, Sonoro Iraq B.V.is the operator under the License.
- The Licensee is required to make an investment of US$1,500,000 on exploration activities and construct a topping facility having a minimum 1,000-barrel per day capacity within 18 months from making a commercial discovery. The initial $1,500,000 investment amount has been met;
- There is a remaining period of approximately 18 months in the initial exploration period since removal of Force Majeur, followed by a 30 year exploration period with extensions for any carved out exploitation areas to develop asphalt/bitumen. A total of 80% of revenues are available for cost recovery.
- The operations were placed in force Majeure in July 2014 due to the ongoing conflicts in Iraq and on March 15, 2017 the Company announced the confirmation from the Salah ad Din government to remove this Force Majeure and restart its investment initiatives.
From 2012-2014, Sonoro Iraq focused its efforts on obtaining the necessary governmental approvals to conducts initial exploration and operations under its License, while continuing with its geological study and review of other unconventional resources (asphalt/bitumen) in the Province.
Sonoro Iraq identified and planned/engineered the drilling of several wells in the North Salah ad Din prospect which, through an Independent Resource Report performed by RPS in 2011, identified most likely contingent Resources of 1.2 billion barrels of oil in place.
Sonoro Iraq continued with its extensive exploration study based on geological and geophysical data covering the license area and other parts of Iraq. Within the shallower Tertiary formations alone, Sonoro Iraq identified 47 individual leads and prospects across the Province.
Unfortunately due to Force Majeure in July 2014 these projects and opportunities have not been pursued further. With the removal of Force Majeure and confirmation from the Salah ad Din Provincial government to commence operations, BSI will now seek to build its Iraq team, reestablish its presence, pursue various investment projects, including the granting of new licenses, if necessary, with a focus on exploitation and cash flow generation.