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Monday, July 1, 2013
EnerGulf Resources Inc. was granted a 15% interest under a new Petroleum Agreement recently approved by the Namibian government for Block 1711, offshore Namibia. Gazania 148 Investments (PTY) Ltd. will have a 75% working interest in the 1711 project, EnerGulf will have a 15% working interest, and Namcor will have a 10% carried interest to production.
The agreement replaces in its entirety the 2006 Petroleum Agreement under which the company participated in the drilling of the Kunene #1 offshore well during 2008; hydrocarbons were produced in the well bore, although not in commercial quantities.
Under the new agreement for the exploration license the companies have initial term of four years commencing June 2013, which may be renewed by the government twice for additional two year periods, and provides for work programs and minimum expenditures.
During the initial exploration period a minimum of $40 million must be spent on a work program that includes, among other things, the acquisition of at least 2,500 sq km of 3D seismic in the southwestern quadrant of block 1711; processing of the seismic data via pre-stack depth migration; AVO processing for post-rift prospects; optional processing through Reverse Time Migration; acquiring sea-floor piston cores over vents identified with side-scan program; procuring drilling vessel and drilling one exploration well to the base of the syn rift and not less than a depth of 5,500 meters below the sea level.
The First Renewal Period (two years) and the Second Renewal Period (two years) each have a minimum exploration expenditure of $40,000,000 and each include the requirement to drill one exploration well to a depth based on the results of the previous wells.
Gazania has provided the government with the guarantees required to cause the exploration license to be issued, a $4 million bank guarantee (equal to 10% of the first period exploration requirement) and a guarantee of performance of the parties’ obligations.
A JOA will be entered into among Gazania, EnerGulf, and NAMCOR, which will further define their respective rights and obligations relating to exploration of Block 1711 and, if warranted, production. The JOA will address such matters as any assignments of interests under the agreement and license, changes in operatorship, and differences between payment obligations and participating interests in the project to accommodate matters such as cost recoveries and the Namcor carried interest. The company expects to have the JOA settled and exploration under way by early Q4 2013.
Jeff Greenblum, chairman and CEO, commented: “We are delighted to have offshore Block 1711 back on track. It is a world-class project with multiple prospects and three independent plays, being geologically similar to the highly successful fields of the Santos Basin, Brazil, nearby offshore Luanda, Angola and Deepwater Gulf of Mexico. We are confident that the quality of our Namibian asset will be proven through the upcoming work programs, and we look forward to working with our new co-venturer and operator to achieve significant hydrocarbon discoveries.”
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