30 Nov 2015 07:00
30 November 2015
Completion of acquisition of an interest in Block C-10, Mauritania
Sterling Energy plc (the 'Company' - Ticker Symbol: SEY), the AIM listed upstream oil and gas company with interests in Africa, is pleased to announce that completion has now occurred under the sale and purchase agreement between its wholly owned subsidiary, Sterling Energy Mauritania Limited ('SEML') and Tullow Mauritania Limited ('Tullow') to acquire a 13.5% working interest in the production sharing contract for Block C-10, located offshore in the Islamic Republic of Mauritania (the 'PSC').
The holders of the PSC are now:
Tullow (Operator) | 76.5% |
SEML | 13.5% |
Société Mauritanienne des Hydrocarbures et de Patrimoine Minier ('SMHPM') | 10% |
Block C-10
The PSC, awarded in 2011, is in the second phase of the exploration period ('Phase 2') and covers Block C-10, offshore Mauritania, comprising an area of approximately 10,725km2. Phase 2 of the PSC is due to expire on 30 November 2017 and has a minimum work obligation of 1 exploration well.
Block C-10 lies in water depths of 50m to 2,400m with full legacy 3D seismic coverage. Tullow has matured a drill ready Neocomian carbonate prospect in water depth of approximately 100m. The joint venture anticipates that an exploration well to test this prospect will be drilled in 2017. The gross cost of the well is likely to be substantially less than the $77m ($11.55m net to SEML) initially budgeted, given market conditions. Should the joint venture not fulfil the minimum work obligation, the joint venture's gross liability to the Government would be $7.5m ($1.125m net to SEML).
Following the completion of Phase 2, the joint venture may elect to enter into Phase 3 (with a 3 year term) with a minimum work obligation of 2 wells.
SEML and Tullow will carry SMHPM's ten percent (10%) interest proportionally during the exploration period of the PSC.
The block is within a proven petroleum basin and offers exposure to multiple play-types from the under-explored Jurassic and lower Cretaceous carbonates to Cretaceous and Tertiary clastic plays.
Block C-10, along with the recently completed entry to Block C-3, provides SEML entry to a multi-play exploration setting on an emerging shelf margin; the latter recently highlighted by the SNE-1 well (P50 of 330mmbbls) discovered by Cairn Energy to the south in Senegal. Exploration success has continued in the basin with the April 2015 Tortue-1 deep water gas discovery (P50 of 8TCF) announced by Kosmos Energy in block C-8, offshore Mauritania.
Comment
Eskil Jersing, the Company's Chief Executive Officer commented:
"We are pleased to have the opportunity to partner with Tullow and SMHPM in the C-10 block in addition to the recent C-3 entry. As a result of recent play opening discoveries, this part of the West African margin has rapidly become an exciting new oil and gas province. The Company looks forward to de-risking the remaining potential on block, including the deeper shelf carbonate play, leading to an exploration well with Tullow in early 2017"
Qualified Person
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Mr Matthew Bowyer, Exploration Manager of the Group, who has been involved in the oil industry for over 20 years, is the qualified person that has reviewed the technical information set out above.
Further Information
Further information can be found on the Company's website at www.sterlingenergyplc.com
Sterling Energy plc | Tel: +44 20 7405 4133 |
Eskil Jersing (CEO)
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Peel Hunt LLP | Tel: +44 20 7418 8900 |
Richard Crichton Ross Allister
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