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Monday, June 15, 2015
Pancontinental Oil & Gas and Tullow Oil, operator of Namibia’s EL 0037, agreed (subject to certain conditions) to amend the farm-out agreement between the companies from September 2013.
Tullow recently requested from Pancontinental an extension to a deadline under the farm-out agreement concerning a ‘drill or withdraw’ decision by Tullow, which was to have been made by August 11, 2015. Pancontinental has agreed to an extension of the deadline to March 31, 2016. The extension will allow the JV time to further assess the results of the extensive exploration program of 3D seismic and geological work that have been carried out to date.
Pancontinental said that it was very encouraged by Tullow’s exploration results within the EL 0037 area. Since farming-in to the project in 2013, Tullow has so far undertaken exploration work at a cost of around $34 million of the overall estimated farm-in program, with Pancontinental free-carried.
In order to retain its 65% interest, Tullow must now fully fund one exploration well at no cost to Pancontinental.
Tullow has to date fully carried out the agreed program and Pancontinental is optimistic that Tullow will continue exploration on the blocks and proceed towards drilling.
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