Laredo Oil, Inc. (OTC:LRDC) has signed a non-binding letter of intent with an unnamed Argentine oil operator to explore commercial deployment of its proprietary Underground Gravity Drainage technology in selected oil fields in Argentina.
Described as an energy technology and development company, Laredo focuses on commercializing its gravity-drainage approach to boost oil recovery from mature and underperforming reservoirs. The agreement marks the company's first potential commercial opportunity for the technology in Argentina.
Under the LOI, the two parties will evaluate selected areas through a technical, legal, financial and operational process that includes front-end engineering and design. If the evaluation yields satisfactory results, financing and regulatory approvals are obtained and definitive agreements are executed, Laredo would finance and deploy the facilities through a dedicated Argentine operating entity.
The LOI structure provides for Laredo to fund agreed project-development expenditures and recover its investment from incremental production attributable to the technology, structured under a production-sharing agreement.
The LOI remains in effect until the signing of definitive agreements, or a shorter period mutually agreed in writing by both parties. While the agreement is otherwise non-binding, it contains binding non-commercial provisions, including governing law and non-disclosure clauses. The Argentine operator is subject to a 180-day exclusivity period.
"This LOI gives us a potential pathway toward commercial deployment and creates a foundation for future expansion across Argentina," said Mark See, chief executive officer of Laredo Oil, in a statement accompanying the announcement.
Shares of Laredo Oil trade over-the-counter under the ticker LRDC.
