COPL agrees terms for Liberia block

Offshore staff

CALGARY, Canada -- Canadian Overseas Petroleum (COPL) is set to acquire a 100% interest in Block LB-13 offshore Liberia from Peppercoast Petroleum for $85 million.

The transaction should close around June 30, assuming approval from the National Oil Company of Liberia (NOCAL).

Block LB-13 covers roughly 2,400 sq km (926 sq mi), and is adjacent to blocks LB-14 and LB-12 operated by a major oil company. Under the transaction, COPL also will acquire 2,023 sq km (781 sq mi) of 3D seismic compiled and licensed to Peppercoast in 2010.

The eight-year exploration license for the block started in May 2007 and comprises three phases of four, two, and two years. A well must be drilled during both the second phase (due to start on May 23) and the third phase.

COPL has also loaned Peppercoast $15 million on a secured basis to pay TGS-Nopec Geophysical for acquisition and processing of the 3D seismic survey, and to satisfy Peppercoast’s work obligations under the PSC’s first phase.

Arthur Millholland, CEO of COPL, said: “The drilling targets we have identified on LB-13 are Cretaceous turbidite sand stratigraphic traps analogous to the Palaeocene drilling targets we are pursuing in the UK central North Sea.

“We have identified a number of drilling prospects on the block, each having strong seismic AVO anomalies and other direct hydrocarbon indicators which possibly suggest the presence of hydrocarbons.”

COPL plans to drill the strongest prospects, starting in 1Q 2012 (the Phase 2 obligation well). Other companies are expected to drill deepwater Liberian wells later this year in blocks 8, 9, and 15.

05/23/2011