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LONDON (Alliance News) - Global Petroleum Ltd Thursday said it has secured a 24-month extension for its exploration licence offshore Namibia and said it will no longer be required to drill a well within that time frame.
Global Petroleum said the 24-month extension for the petroleum exploration licence 29 will start from December 3, 2015, when the licence was due to expire. The licence covers two offshore blocks, 1910B and 2010A.
Under the original terms of the licence extension, Global Petroleum would have been required to drill at least one well on the licence within that 24-month period. However, Global has negotiated different terms with authorities that will no longer require the company to drill that well.
Global said it agreed the amended terms because prevailing market conditions have had a "particularly negative impact" on the exploration front, particularly in Africa.
Therefore, Global Petroleum will not have to drill a well before the extension expires, but it will have to reprocess all the existing 2D seismic lines across the licence area and acquire 800 kilometres of long offset 2D seismic over the licence, using that existing data to design the new survey to acquire the new 2D seismic data.
The existing data on the licence area has proved to be "very encouraging" in terms of hydrocarbon potential, according to the company.
"In Global's view, this has significantly upgraded the overall prospectivity of the acreage, and has clearly facilitated the selection of the areas to be relinquished," said the company.
Under the terms of licence, Global Petroleum and its partner had to relinquish 50% of the licence area when it renewed the licence. Global, through its subsidiary, retains its 85% stake in tjhe two blocks covered by the licence, with its partners NAMCOR and Bronze Investments Pty Ltd holding 10% and 5% respectively, both as carried interests.
"We would like to thank the Ministry of Mines and Energy in Namibia for their commercial and practical approach to concluding this Agreement. From our side, we are pleased that we will be able to retain what we believe to be the more prospective half of our acreage, containing the most exciting prospects," said Chief Executive Peter Hill.
"Following our recent work, we regard our own acreage as being amongst the most exciting in the country, and the new commercial terms announced today will enable us to progress exploration on the block without over-commitment. Accordingly we are very happy to have renewed our licence on the revised terms," he added.
Global shares were down 5.6% to 1.77 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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