African Petroleum reports slow progress on license discussions

African Petroleum says an exclusivity agreement covering the SOSP license offshore Senegal, and the A1 and A4 licenses offshore The Gambia has expired and will not be extended.

Offshore staff

LONDONAfrican Petroleum (AP) says an exclusivity agreement covering the SOSP license offshore Senegal, and the A1 and A4 licenses offshore The Gambia has expired and will not be extended.

Although the Senegalese authorities expressed a willingness to proceed with the SOSP license once AP secured a farm-out, progress in The Gambia has been slow.

The exclusivity agreement, which regarded both countries as one transaction, appeared too restrictive as AP could not secure the license extension without first resolving the situation in The Gambia.

At present the Senegalese authorities are considering the company’s alternate proposal to extend the license by 18-24 months, giving it sufficient time to acquire 3D seismic and drill an exploration well on the block.

However, any extension would remain conditional on a suitable farm-in partner coming on board. AP now plans to start discussions with companies that had expressed interest in farming into SOSP but were barred from entering into commercial negotiations due to the exclusivity agreement.

The company hopes to finalize a standalone farm-out transaction soon, and at the same time continues to reserve its rights on the ROP license.

As for the A1 and A4 licenses, AP has been in dialogue with Gambian officials on identifying a solution satisfactory to all parties. The company’s CEO and CFO recently travelled to The Gambia for a meeting with President Barrow in Banjul.

AP is now hopeful of receiving formal feedback and clarity on the situation from the government in early August. It adds that it will deploy the dispute resolution mechanism provisions of the licenses should the government’s decision not be favorable to the company.

Other industry players continue to express interest in the licenses, assuming the situation with the Gambian government can be resolved.

07/21/2017

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