Syntroleum Corp. has executed a Heads of Agreement (HOA) by a wholly owned subsidiary to further delineate and potentially develop an oil and gas discovery in Oil Mining Lease (OML) 113 offshore Nigeria. The OML 113 license covers 454,000 acres off western Nigeria near the border with Benin. OML 113 is owned 100% by the Yinka Folawiyo Petroleum Co. Ltd. (YFP), a leading Nigerian oil independent.

OML 113 includes the previously discovered Aje field; a partially delineated crude oil, natural gas, and condensate accumulation 15 mi offshore. Although the Aje field contains potentially commercial volumes of crude oil, condensate, and natural gas liquids, it has needed a viable development solution since its discovery in 1996 due to the large natural gas volumes present, a problem Syntroleum believes can be solved by its gas-to-liquids (GTL) technology, and in particular by its previously announced GTL Barge concept.

The Aje field is defined by high quality 3D seismic data and two tested wells that were drilled in 1996-1997 from a surface location in 300 ft of water. The Aje-1 discovery well encountered natural gas, condensate, and crude oil pay in a thick sequence of Turonian-age sandstones. The Aje-1 flowed at stabilized rates of 2,389 b/d from 37 ft of net pay in the oil zone, and tested at combined rates of 60 MMcf of gas and 1,729 b/d of condensate from three drill stem tests in the 157 ft of net pay in the overlying gas cap.

09-02-04