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Sunday, October 18, 2015
Gulfsands Petroleum revealed that the extension period of the Fes agreement submitted to Morocco’s state-run firm ONHYM to further extend the Fes agreement by six months has not elicited any response from ONHYM. The extension request was to allow Gulfsands time to continue its farm-out process.
ONHYM has called the $5-million bank guarantee held for the performance of the agreed minimum work program, of which 350 km of 2D seismic, 100 sq km of 3D seismic, and drilling of three wells remain outstanding. As a result $5 million of restricted cash has been forfeited.
In recognition of the uncertainty of securing an industry partner before the expiry of the Fes agreement, the company impaired its exploration and evaluation assets by $22.1 million, comprising the full amount of expenditure incurred in relation to the Fes agreement including restricted cash balances and the fair value attributed at acquisition.
Alastair Beardsall, company chairman said: “We are disappointed not to have been given an extension to progress our discussions with potential farm-in partners. The geology within the Fes area is very complex; only recently have we been able to interpret the re-processed 2D seismic data acquired in early 2014 and begin the process of identifying potential drill-ready prospects, unfortunately we have run out of time to continue the exploration program.”
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