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Tuesday, January 1, 2013
Sonde Resources Corp. has farmed out 66.67% of its interest in the Joint Oil Block to Viking Energy North Africa Ltd. Sonde will receive from Viking in total a $3 million non-refundable signature bonus and Viking will assume responsibility for the three-well exploration commitment under the terms of the EPSA. The first well, Fisal, is expected to spud in 2013. There will also be a seismic acquisition over the Hadaf prospect.
Viking will also fund 100% of the Joint Oil Block share of the Unit Plan of Development for the Zarat Field. Viking will also provide to Sonde, prior to closing, the appropriate form of corporate guarantee with the agreed upon commercial terms, in order to secure the remaining work commitment under the terms of the EPSA.
Sonde will receive 20% of the cost recovery and profit share revenue through a recovery of $70 million. After payout of all Viking expenditures, the revenue will be split 33.33% to Sonde and 66.67% to Viking. Sonde retains the option to fund its 33.33% share of two of the exploration wells. Any future discoveries will be shared 33.33% to Sonde and 66.67% to Viking.
As previously announced, the shareholders have now approved the second exploration phase extension and are reviewing the request to appoint Viking as operator of the Joint Oil Block.
Jack Schanck, president and CEO said, "Sonde is very delighted to have the Viking Group as our partners in the Joint Oil Block development. Their expertise in FPSOs, their strategic relationship with the Thome Group and financial capability will allow our joint venture to develop the Zarat Field, and explore the potential of the Joint Oil Block. We look to this joint venture as a long-term relationship and commitment to the people of Tunisia and our Joint Oil partners. Sonde will plan a series of investor calls and meetings in early 2013 to fully expand on the opportunity this agreement represents."
Sonde has reached a tentative agreement with PA Resources, the Zarat license holder, on the unitization principles of the Zarat Field, which is located to the south of the Joint Oil Block. The definitive agreement will include principles to the Unit Area, Unit Plan of Development Area, and Tract Participation. The Unit Plan of Development is on track for submission to the Tunisian Authorities and approval by the end of Q2 2013. A detailed reservoir technical evaluation undertaken jointly by Sonde/Viking and PA Resources is ongoing. Preliminary results performed by Sonde indicate that the gas recycling is a viable production option. This may advance the project to initial cash flow as early as 2015.
Conrad Clauson, chairman of the Viking Group, indicated, "Viking Energy Group is very pleased to establish a long-term partnership with Sonde for the exploration and development of the Joint Oil Block. We look forward to working with our partners with the objective to develop liquid hydrocarbon resources contained in the Zarat field within the next two years using an FPSO vessel, followed by the monetization of the gas resources."
"The Viking strategy for the Zarat field is to develop it through a two staged process, appraise and develop it with the objective to be able to convert the prospective resources into reserves and then tie in each future discovery into the same FPSO vessel as the one we believe should be used for the Zarat field development.
"The development of the Zarat field will have strong operational synergies with the development of the Isis field located offshore Tunisia and also operated by the Viking Energy Group."
"Viking will be working closely with all parties and our strategic industrial partner, Thome Oil and Gas Pte Ltd., which is a part of the Thome group of companies based in Singapore to evaluate how we can fast track the development of the production and storage solution, minimize our capital expenditures, and have cost effective operation. Thome is an experienced FPSO/FSO operator which already has a presence in North Africa (the operations and maintenance management of Al Zaafrana FPSO in Egypt) and will also operate the Isis FPSO in Tunisia.”
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