Petroleum Africa
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Monday, October 26, 2015
African Petroleum issued an update on its farm-out activities on its assets in Africa. The company continues to seek strategic partners on its 10 licenses in Côte d’Ivoire, Liberia, Senegal, The Gambia, and Sierra Leone in order to share risk and the potential reward of the company’s exploration program, and to fund its high impact exploration drilling campaign in 2016 and beyond.
The companysaid that currently its immediate focus is to conclude the transaction in Côte d’Ivoire, and to farm out its assets in The Gambia and Senegal as ongoing discussions mature with key potential partners. Management of the company has confidence that agreements will be concluded in due course.
In Cote d’Ivoire African Petroleum has signed a binding joint bidding agreement with a London-listed oil and gas company to provide a framework for the incoming third party to secure a 45% operated interest in a PSC (on terms to be agreed) coveringBlock CI-513. It is intended that African Petroleum will hold a non-operated interest of 45%, with the remaining 10% carried interest held by Petroci, the National Oil Company of Côte d’Ivoire. Completion of the transaction is subject to negotiation and entry into commercial agreements and several conditions precedent including, but not limited to, the agreement and approval of the government. African Petroleum and the prospective partner are working together towards completion of the transaction as soon as possible, and the company expects to make further announcements, including further details of commercial terms, in due course as progress is made.
Meanwhile, third party activity continues in the region with the Vitol led group due to commence exploration drilling during Q4 2015 in theirCI-508 license, which is adjacent to AfricaPetroleum’s CI-509 and CI-513 licenses.
In The Gambia and Senegal,African Petroleum is in advanced farm-out discussions with several interested parties across the company’s assets in both countries. Due to the success of Cairn Energy in Senegal and Kosmos Energy in Mauritania this part of the Atlantic Margin has become highly active. A significant level of activity in the region is ongoing as Cairn and its partners commence a multi-well exploration and appraisal program to be drilled across their Senegalese acreage. In addition, Kosmos, currently drilling in Mauritania, has announced plans to move south into northern Senegal to follow-up their significant Tortue gas discovery with exploration and appraisal drilling.
African Petroleum’s data room schedule remains active with a high caliber of industry companies continuing to view the data. A number of these parties have confirmed their interest in pursuing a transaction and have initiated detailed due diligence. The Company seeks to attract binding offers as soon as possible. Further announcements on progress will be made in due course.
Based on the positive and ongoing dialogue with numerous potential partners, African Petroleum is confident that despite the industry-wide challenges created as a result of the low oil price environment, the attractiveness of the company’s assets should allow for a successful conclusion to ongoing farm-out discussions. It is hoped that the company will be in a position to announce further progress on these discussions by the end of 2015.
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