Centurion Energy International Inc. and Petro-Canada have signed a funding agreement covering the Mellita exploration permit offshore Tunisia, owned 100% by Centurion's wholly owned subsidiary Ecumed Petroleum (Grombalia ) Ltd.
Under the terms of the agreement, Petro-Canada Mellita Inc., a wholly owned subsidiary of Petro-Canada, will operate and fund 100% of the cost of an exploration program, up to $13.5 million, in return for a 72.5% interest in the 845,000-acre permit. The exploration program will consist of up to 2,274 km of 2D marine seismic, 75 km of 2D land seismic, and the drilling of two exploration wells – one offshore and one onshore Djerba Island. The transaction is subject to final approval by the Tunisian authorities.
ETAP, the Tunisian State Oil Co., has the right to participate for up to 50% in the development of any discoveries made on the permit. In the event of a discovery, Centurion and Petro-Canada would be reimbursed for exploration costs equal to ETAP's participating interest and ETAP would pay its share of future development costs.
The land seismic has already been acquired and the marine seismic program is underway, with completion expected during the first week of September. Drilling locations will be selected following processing and interpretation of the seismic, and drilling is likely to be conducted as early as the first half of 2004.