Offshore staff
(West Africa) - Energem Resources Inc. secured rights to upstream oil and gas assets in the African countries of Mali and Nigeria. This follows Energem's recently announced acquisition of block 18 in Mauritania. The finalization of further upstream asset acquisitions underway in two other African countries is near conclusion.
The Company, through a wholly owned subsidiary, has acquired the exploration and exploitation rights to oil blocks 12 and 13 in the Republic of Mali. The sign-on bonus for these two blocks amounts to $3 million payable within 30 days of signature of the production sharing agreement.
The work program requires minimum commitments in respect of seismic and geological work and well drilling amounting to $11.6 million for block 12 and $12.1 million for block 13. In terms of the agreement this commitment is required over the initial four year period and is weighted toward year four when first well drilling must be complete.
The award of these blocks was confirmed by the Minister of Mines, Energy and Water for the Government of The Republic of Mali and a production sharing agreement was concluded on Sept. 13, 2005.
In terms of existing arrangements, controlled subsidiary FirstAfrica Oil Plc has, subject to a mutually acceptable independent valuation process, a first right of refusal to acquire these Mali properties from Energem.
Operating commitments to training and surface taxes per annum total less than $300,000 per annum per block.
In Nigeria the company, through a wholly owned subsidiary, has, in the 2005 Nigerian Licensing Rounds, been awarded oil and gas E&P licenses to blocks OPL 905, 722, 733, 809 and 810. Simultaneously, the company has entered into two joint venture arrangements in respect to the license awards.
The licenses are granted for a 10-year period, subject to satisfactory interim performance, over which period the minimum work program is to be performed. For block OPL 905, the work program commitment shall total a minimum of $21.7 million including minimum local content of $9.5 million, and for the remaining blocks, $24 million per block including local content of not less than $10.3 million per block.
With block OPL 905, the company has entered into a technical operating partnership with Gas Transmission and Power Ltd. a Nigerian company, who will participate in the block's development as a 60% equity partner, the company retaining a 40% equity participation.
In respect of the remaining blocks, the company has entered into a technical partnership with New Nigerian Development Company Ltd. of Nigeria who shall have a 10% participating carried interest and may elect to increase this to a 15% participating paid interest in any or all of these blocks.
10/06/05
