update Subject to significantly improved pricing for natural gas produced in India, the Company's estimate of its share of planned capital spending in India is as follows:
D6 Block
The Company's estimate of its share of planned capital spending for the D6 Block is $35 to $45 million for the fiscal year ended March 31, 2014, and $40 to $50 million for the fiscal year ended March 31, 2015. These figures include estimated costs for the following planned capital projects:
D1 D3 producing field - water handling and compression
MA producing field - an additional gas production well and compressor modifications
R-Series development - field development plan ("FDP") submitted in January, 2013
Satellite Area development - FDP approved
Other Satellite Area - pre-development costs
D1 D3 exploration - drilling of the MJ-1 prospect
NEC-25 Block
The Company's estimate of its share of planned capital spending for the NEC-25 Block is $3 to $5 million for the fiscal year ended March 31, 2014, and $5 to $10 million for the fiscal year ended March 31, 2015. These figures include estimated costs for the NEC-25 development project (FDP to be submitted by March, 2013).
The level of capital spending in India for fiscal 2014 and fiscal 2015 is subject to a number of factors, including significantly improved pricing for natural gas produced in India, regulatory and government approval of the various capital projects, and refinement of project expenditure forecasts for the R-Series, Satellite Area and NEC-25 development projects.
Farm-outs, Asset Dispositions and Other Arrangements
The Company has signed an agreement to receive a total of approximately $50 million in two tranches from a former partner in exchange for assuming the partner's obligation for future drilling commitments. The initial tranche of $25 million is to be received by March 15, 2013.
For the Qara Dagh Block in Kurdistan, the Kurdistan Regional Government ("KRG") has announced that they have agreed all of the terms and awarded the Qara Dagh block to Chevron. Receipt of approximately $15 million net to Niko is to occur within 60 days of the earlier of (i) formal signing of the production sharing contract between the KRG and Chevron, or (ii) May 31, 2013.
The Company is currently in negotiations with various third parties regarding farm-outs and non-core asset dispositions and the Company is confident that the combination of ongoing funds from operations from its producing properties and the proceeds it expects to receive from some or all of the farm-outs, asset dispositions and other arrangements that the Company has been working on will provide appropriate funds for the Company's capital spending plans.
February 21, 2013