What About the Other Royalty?From the July 2005 financial statement notes:
6. RECOVERY OF PETROLEUM EXPLORATION COSTS
The Company previously entered into an agreement with Tri-Valley Oil and Gas Co. (“TVOG”) in the year ended July 31, 1999 pursuant to which the Company would acquire a 5.81% working interest in the initial well to be drilled on the Ekho Project oil and gas property (the “Ekho Project”) in the San Joaquin Valley, Kern County, California. In consideration, the Company was to fund 6.64% of TVOG’s property acquisition and work program costs, including drilling the initial well.
In the year ended July 31, 2000, the Company decided not to participate in the Ekho Project and accordingly, $1,604,986 was written off to operations.
During the year ended July 31, 2004, TVOG paid the Company an advanced abandonment cost of $57,364 (US $41,564) in consideration that the Company terminate all terms of the agreement and thereupon will have no rights or obligations under the agreement. TVOG also granted the Company a 0.7231% overriding royalty participation on the property.