Petroleum Africa
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Thursday, April 17, 2014
The government of Seychelles has approved the formal documentation of Ophir Energy’s farm in on WHL Energy’s large block offshore the island nation, Under the agreement Ophir will earn a 75% stake in the petroleum exploration project area.
Seychelles’ VP Danny Faure was joined by a number of Seychelles dignitaries, including representatives of national petroleum regulator PetroSeychelles and Ambassador Barry Faure, at a special signing ceremony. During the ceremony, the VP who signed on behalf of the President, WHL Energy MD David Rowbottam and Ophir Energy Commercial Director, Glenn Corrie, signed formal documentation approving the farm-in agreement including an amended Petroleum Agreement (PA). The amended PA includes variations to the minimum work commitments, extending the term of the current exploration period to July 31, 2016, a reduction in the size of the Seychelles permitted area controlled by the JV to 12,856 sq km and the transfer of operatorship over the project areas to a subsidiary company of Ophir.
Ambassador Faure earlier said: “The Seychelles was pleased to have a company of Ophir Energy’s international standing and technical expertise join WHL Energy in the search for hydrocarbons off the country’s coastline. We believe there is potential for large amounts of oil and gas deposits to be found in Seychelles waters and we welcome the commitment and investment of companies like Ophir Energy and WHL Energy in searching for those potential riches. We look forward to this new Joint Venture moving forward in a timely manner to meet its commitments to explore in our water with great attention to environmental and technical excellence.”
Commenting on the signing of the final approvals, WHL Energy’s Rowbottam said: “This is a significant milestone in WHL Energy’s history and something we have been working very hard to achieve since late 2010, when the Seychelles interests were first acquired. Since that time we have undertaken major investments including being the cornerstone client for a multi-client 2D seismic survey in Seychelles waters, additional substantial original work to develop the exploration potential of the Seychelles, identified that the Seychelles is most likely to be oil prone and, most importantly, formed a close working and personal relationship with the Seychelles Government and PetroSeychelles.
“I would like to thank President Michel for his continuing support, and likewise the Board and Staff at PetroSeychelles, and I would also like to take this opportunity to thank the WHL Energy team. We have only a small team at WHL Energy but we have a very strong focus on technical excellence and that has paid dividends in being able to develop a unique understanding of the Seychelles prospectivity and to now attract a Joint Venture partner of the quality of Ophir Energy. Independent assessment has identified a collective billion barrels plus opportunity within our project area and we now look forward to working closely with Ophir Energy to further explore the very large oil potential we believe is contained there,” Rowbottam said.
The winning 3D seismic contract bidder for an initial seismic survey under the new JV is expected to be named within the next few weeks, potentially allowing the acquisition program to commence as early as the end of May or the beginning of June to take advantage of the current availability of a number of state-of-the-art seismic vessels in the East African region – which would also significantly reduce vessel mobilization costs. Ophir will fully fund the initial 1,500 sq km 3D seismic acquisition program up to a total amount of $17 million, now that the agreement has become unconditional. Reaching this milestone will also trigger the payment of an initial $4 million to WHL Energy for the recovery of past costs.
Following the acquisition and evaluation of seismic, and on or before 31 July 2015 (or 31 December 2015 if a seismic vessel has not commenced data acquisition by 31 May 2014), Ophir may either withdraw from the farm-in or exercise the option to both fully fund the acquisition of a further 1,000 sq km of 3D seismic, up to a total amount of $12 million and
fund 90% of the costs of the first exploration well, up to a total amount of $30 million.
Upon exercising the option to retain its interests, Ophir will pay WHL Energy a further $2 million in cash for further partial recovery of past costs.
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