Petroleum Africa
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Wednesday, May 24, 2023
Corcel Plc, an extractive industries exploration and development company, with interests across battery metals and oil and gas, announced that it has signed its first oil and gas acquisition with the purchase of a 90% interest in Atlas Petroleum Exploration Worldwide Limited (APEX), that has working interests in several historically producing oil assets in the Kwanza Basin, onshore Angola.
Highlights
Corcel Executive Chairman, James Parsons, commented: “I am delighted to announce this first acquisition in our oil and gas strategy, providing a strong initial platform on which to progress our pan-Angola/Brazil growth strategy. The metrics on this acquisition are compelling for Corcel shareholders and the window is now open for rapid further consolidation onshore Angola alongside new asset acquisitions in Brazil. I look forward to being in Angola later this week with our partners for the license signature and award ceremonies.
“The Kwanza basin has been producing for 35 years, is a well-understood petroleum system, and has both significant scale and upside. Corcel sees significant opportunities to increase the legacy operator estimated resources given the structural configuration of the basin and recent new structural mapping. We also see large stratigraphic and structural pre-salt structures on blocks, analogous to the offshore Cameia discovery. Our initial focus will however be on quickly securing first oil and revenues through our redevelopment opportunities.”
Completion of the transaction is contingent upon the formal execution of three Risk Service Contracts (RSCs) covering the KON 11/12/16 blocks, with the Angolan government, expected later this week. The terms of the RSCs include an initial exploration phase of 5 years, with a subsequent exploration phase of 2 years and a base production period of 20 years. The minimum spend on the blocks is $6m on KON-11 and KON-12 and $3m on KON-16, with commitments to drill one well on all three blocks. As part of the transaction, the vendors have agreed to provide any guarantees should they be required by government. Further announcements on completion will be made as appropriate.
Consistent with APEX’s obligation with the Angolan government to develop the capabilities of and strengthen local exploration and production companies, the company has also signed an agreement with a local exploration and production company to buy this entity out of an internal consortium agreement with APEX, whereby they would otherwise have had entitlement to 25% of the APEX position in these three licenses, and would also have entitlement to certain cash payments. This buy-out agreement involves Corcel issuing 28,240,839 new ordinary shares and paying $225,000 cash expected to be utilized towards the local exploration and production company’s operations. The shares will be locked in for 18 months.
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