Petroleum Africa
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Wednesday, December 24, 2014
African Petroleum Corp. has signed a non-binding term sheet agreeing terms with an unnamed oil and gas firm to farm-in to the company’s 100% owned LB-08 license offshore Liberia. Pursuant to the term sheet the third party has agreed, subject inter alia to completion of due diligence and the entering into of mutually agreed contracts, to acquire a 50% net participating interest in the LB-08 license in return for the payment of 50% of all future costs and expenditures relating to acreage and a contribution to past costs and expenditures.
The acreage is located in a highly prospective region offshore Liberia. In an independent review of African Petroleum Corp.’s acreage conducted by ERC Equipoise Ltd. in April 2014, the estimated net unrisked mean prospective oil resources of LB-08 exceeds two billion barrels. With an oil discovery in the adjacent license and proof of a working hydrocarbon system in the central Liberian basin, the company believes that LB- 08 has substantial potential.
African Petroleum said the completion of the farm-in transaction as contemplated by the Term Sheet is subject to contract and a number of conditions precedent, which, apart from one pertaining to approval from the `Liberian government, must be satisfied or waived no later than January 29.
Stuart Lake, the company’s CEO said: “The signing of the Term Sheet is a significant milestone for African Petroleum Corp. Should the farm-in transaction complete, the incoming third party will bring a breadth of knowledge and experience to the partnership and will allow the company to continue its exploration program in its highly prospective acreage in Liberia benefiting from the falling operating costs brought on by a lower oil price. African Petroleum Corp. continues its negotiations with potential partners in its other licenses and remains confident that it will secure additional farm-outs in due course.”
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