LONDON – Dominion Petroleum has agreed to farm-out to a subsidiary of Mubadala Oil & Gas a 20% stake in block 7, deepwater Tanzania. Following the transaction, which is subject to Tanzanian government approval, Dominion will hold an 80% operating interest.
In exchange, Mubadala will pay a $20 million cash consideration and carry Dominion’s remaining 80% working interest in an imminent seismic program on the block up to a cap of $2.4 million.
At the end of last year, Dominion acquired extensive 3D seismic over a lead identified as the Alpha structure.
The partners will co-operate to assess potential targets, both within Alpha and on other prospects mapped within the survey area.
Andrew Cochran, CEO of Dominion, said: “The planned partnership may seek to bring in another party as we approach block 7's drilling phase next year.”
Offshore Kenya to the north, Dominion has signed the PSC for block L15 in the Lamu basin with the Kenyan Energy Ministry, giving it a 100% operated interest. The company already operates offshore block L9.
Dominion plans to reprocess existing 2D seismic data, perform block-wide G&G studies, and acquire a minimum of 250 sq km (96 sq mi) of 3D seismic data during the initial two-year exploration term, for a minimum outlay of $2.85 million.
Thereafter, the company can enter the second two-year period by committing to drill an exploration well.
Block L15 is immediately north of block L8, where the 1 Bbbl Mbawa prospect likely will be drilled in mid-2012.
Union Oil drilled the Kofia-1 well on L15 in 1985, encountering oil shows in the Palaeogene and Upper Cretaceous intervals.
Dominion says further drilling planned by other operators along the Davy-Walu trend over the next 12 months may de-risk prospectivity in both L15 and the company’s existing L9 block.