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Tuesday, February 10, 2015
Sterling Energy Plc was notified of changes to Premier Oil Plc’s interests in PSC A, PSC B and PSC C-10 offshore Mauritania. Sterling has an interest in these licenses under two royalty agreements with Premier that cover, among other things, a royalty over Premier’s share of production from the Chinguetti field and the commercial development of existing or future discoveries within the PSC A, PSC B, and PSC C-10 contract.
The Royalty Agreements initially covered PSC A and PSC B, including production from the Chinguetti field. In 2011, the exploration areas of PSC A and PSC B were transferred to PSC C-10 and the remaining prospects on PSC A and PSC B, namely the Banda gas discovery (PSC A) and the Tiof and Tevet discoveries (PSC B) were fenced under their existing PSC terms.
Sterling was recently notified by Premier that its interest in PSC B as it applies to the Tiofand Tevet discoveries has expired. PSC A as it applies to the Banda discovery and PSC C-10 has also expired.
Premier’s exit from PSC C-10 does not affect the entry into Phase 2 of PSC C-10 by Tullow Oil Plc and SociétéMauritanienne des Hydrocarbures et du PatrimoineMinier.
Premier’s exit from each of PSC A, PSC B and PSC C-10does not affect the royalty currently received by Sterling from Premier over Premier’s interest in production from the Chinguetti field. Other than Chinguetti, Sterling does not expect the royalty agreements to apply to any other discoveries or developments related to PSC A, PSC B or PSC C-10.
Sterling’s Chairman, Alastair Beardsall said,“It is disappointing that Sterling will not benefit from a royalty linked to Premier’s participation in a development of Banda, Tiof and/or Tevet.”
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