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Addax
Petroleum Adds OPL 227 to its Exploration Portfolio
07-06-2008
Addax Petroleum Corporation has
been awarded a 40 per cent interest in Oil Prospecting License (“OPL”) 227,
offshore Nigeria. Addax Petroleum’s co-participants in the OPL227 license area
are Express Petroleum & Gas Company Limited (“Express”) and Petroleum Prospects
International Limited (“PPI”), both of which are indigenous Nigerian oil
companies. The OPL227 license area is located in the shallow water offshore of
the western Niger Delta Basin, one of the most prolific petroleum basins in the
world.
Commenting, Jean Claude Gandur, President and Chief Executive Officer of
Addax Petroleum said: "Addax Petroleum
continues to demonstrate its commitment to Nigeria and add to its extensive
exploration portfolio with this acquisition. Exploration in our core area of
Nigeria is a cornerstone to Addax Petroleum’s growth strategy and we are excited
to be acquiring a substantial interest in a license that is in a highly
prospective area but has seen very little modern exploration activity to date.
We are also pleased that Addax Petroleum has been selected by Express and PPI to
be their partner of choice for OPL227 and we look forward to working more
closely with both organizations.”
The OPL227 license area covers approximately 851 km2 (210,300 acres) and is
adjacent to and to the north-east of the Shell-operated OML79 license area.
OML79 contains Shell’s EA field development which is reported to have commenced
production in 2002 and to contain approximately 350 MMbbl of remaining
recoverable oil. There have been four wells drilled in the OPL227 license area,
all between 1974 and 1988, all of which encountered hydrocarbons in
non-commercial quantities or shows. In addition, there has been minimal 2D
seismic and no 3D seismic data acquired on OPL227 to date.
Under the terms of the award, Addax Petroleum received a 40 per cent interest in
OPL227 while Express and PPI received interests of 39 per cent and 21 per cent,
respectively. Express is the operator while Addax Petroleum will conduct
technical operations in its capacity as technical advisor. In return, Addax
Petroleum has paid a farm-in fee to Express and PPI and a signature bonus to the
Federal Government of Nigeria, and is obligated to fund 80 per cent of a work
program comprising a minimum of 500 km2 of 3D seismic acquisition during the
exploration period, while Express will fund the remaining 20%. Addax Petroleum
will also initially fund 80 per cent of all capital and operating costs on
OPL227, with Express funding the remaining 20 per cent, and will be entitled to
a higher than pro-rata share of the net production from OPL227 until all capital
costs have been recovered after which all parties will be entitled to their pro
rata share of production.
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