Petroleum Africa
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Tuesday, June 18, 2013
Caracal Energy Inc. completed a previously disclosed farm-in agreement with GlencoreXstrata Plc for the 25% farm-in for the development of the Badila and Mangara oil fields in Chad.
Under the terms of the agreement, Glencore will earn a 25% working interest in the Badila and Mangara Exclusive Exploitation Authorizations (EXAs) with Caracal Energy retaining a 50% working interest. Under the terms of a separate agreement between Glencore and Société des Hydrocarbures du Tchad (SHT), Glencore has acquired a further 10% working interest in the EXAs, with SHT retaining the remaining 15% working interest.
Glencore will fund $300 million of Caracal Energy’s working interest share of JV expenditures in the Badila and Mangara oil fields up to a maximum of $100 million per year. Under the terms of the EXAs, Caracal Energy and Glencore are required to fund SHT’s costs, which are reimbursed through cost oil.
Pursuant to the agreement, Glencore acquired a 33.3% working interest in the Exclusive Exploration Authorizations (EEAs) granted under each of Caracal Energy’s three PSCs in Chad. In consideration for the assignment of the working interest, Glencore paid Caracal Energy approximately $31 million on closing, representing 33.3% of the company’s unrecoverable costs related to the three PSCs as of July 1, 2012.
The three PSCs cover an area of 26,103 sq km in southern Chad. The Badila and Mangara oil fields have a combined size of approximately 100 sq km and are located within 95 km of each other within the same PSC. The Badila oil field covers an area of approximately 29 sq km and is located approximately 16 km from an oil export pipeline. The Mangara oil field covers an area of approximately 71 sq km and is located approximately 111 km from the same oil export pipeline.
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