ExxonMobil negotiates lead role in Liberia block

Canadian Overseas Petroleum (COP) has signed an offshore Liberia asset acquisition agreement with ExxonMobil Exploration and Production Liberia.

Offshore staff

CALGARY, Canada – Canadian Overseas Petroleum (COP) has signed an offshore Liberia asset acquisition agreement with ExxonMobil Exploration and Production Liberia.

Subject to approval from the National Oil Co. of Liberia (NOCAL), ExxonMobil will take a 70% operated interest in the PSC for the block immediately following COP’s acquisition of a 100% interest from the current owner, which was agreed in May. However, this has yet to be approved.

ExxonMobil will pay COP $55 million and also COP’s costs for the first well to be drilled on the block up to a maximum of $36 million.

If those costs turn out to be lower than $36 million, the balance will be directed toward COP’s costs for a second well, if drilled.

Additionally, ExxonMobil will pay COP’s share of joint venture costs estimated at roughly $6 million until completion of the first well. COP will have 30% of the block on closure of the transaction.

Block LB-13 covers around 2,400 sq km (926 sq mi). The PSC has an eight-year term, the second phase of which started in May. A well must be drilled during both Phase 2 and Phase 3.

Last year, 2,200 sq km (849 sq mi) of long-offset 3D seismic was commissioned to evaluate the oil potential of the deepwater Cretaceous sands analogous to recent deepwater oil finds off Ghana and Sierra Leone.

This data was reviewed independently by DeGolyer and MacNaughton. Analysis revealed the potential for numerous Cretaceous turbidite sand stratigraphic traps. These exhibit strong seismic AVO anomalies and other DHIs that could indicate the presence of hydrocarbons.

D&M assesses prospective recoverable resources in the range 1.359 Bbbl to 3.829 Bbbl.

11/21/2011

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