Last checked at 15 Jul 2010 07:00
SOCO International plc
("SOCO" or "the Company")
Nganzi Farm-out Agreement and Spudding of the Nganga Well
The Company announces that its subsidiary, SOCO Exploration & Production - DRC SPRL ("SOCO E&P DRC"), has entered into a farm-out agreement wherein it has agreed to farm-out a 20% interest in the Nganzi Block, onshore the Democratic Republic of Congo (Kinshasa), to INPEX CORPORATION ("INPEX"). INPEX is a current oil producer in another area of the DRC holding a 32.28% interest in various offshore producing fields and facilities and is one of SOCO's co-venturers in Angola. SOCO E&P DRC will remain as the operator with a 65% working interest in the Block. The remaining 15% interest is held by the national oil company, La Congolaise des Hydrocarbures ("Cohydro").
Per the agreement, INPEX will fund 40% of the cost, with half of the funding obligation subject to certain caps on cost overruns, associated with a three well exploration drilling programme. Following the initial three well programme, INPEX will fund its participating interest share of costs associated with the Block. In addition, INPEX will fund its participating interest share of all the historical costs certified as cost recoverable incurred by SOCO E&P DRC on the Nganzi Block.
The assignment of interests is subject to approval of the appropriate regulatory authorities of the Government of the Democratic Republic of Congo (Kinshasa).
The Nganzi Block covers 800 square kilometres, onshore western DRC. Interpretation of the seismic from a 2008 360 kilometre 2D seismic acquisition programme is very encouraging with four large structures identified, three of which will be tested with the initial 2010 drilling programme. Drilling of the first well, the Nganga well on previously designated Prospect "B" in the Block, commenced today.
Each well is anticipated to take approximately 40 to 50 days to drill with another two to three weeks added if testing is required. Pre-drill estimates place mean recoverable resources at approximately 200 million barrels of oil per each of the three structures to be drilled.
Ed Story, President and Chief Executive of SOCO, commented:
"We are pleased to have a partner who, with its co-venturers, has successfully produced and exported oil for many years in the Democratic Republic of Congo."
15 July 2010
ENQUIRIES:
SOCO International plc
Roger Cagle, Deputy Chief Executive and Chief Financial Officer
Tel: 020 7747 2000
Pelham Bell Pottinger
James Henderson Tel: 020 7861 3160
Evgeniy Chuikov Tel: 020 7861 3148
NOTES TO EDITORS:
SOCO is an international oil and gas exploration and production company, headquartered in London, traded on the London Stock Exchange and a constituent of the FTSE 250 Index. The Company has interests in Vietnam, Thailand, the Republic of Congo (Brazzaville), the Democratic Republic of Congo (Kinshasa) and Angola, with production operations in Vietnam and Thailand.