Interesting History re Blocks 291 and 242...Addax involved
Addax Farms in On Nigerian Deepwater Block
Friday, October 20, 2006
Addax Petroleum Corporation announced that its subsidiary has entered into a farm-out agreement with Starcrest Nigeria Energy Limited, an indigenous Nigerian oil company, for deepwater block OPL 291. Following the farm-out signing, the two companies signed a PSC with NNPC, which obligated them to pay a $55 million signature bonus.
Addax Petroleum has a participating interest of 72.5% and is the operator. OPL 291 is located approximately 130 kilometers off the Nigerian coast. OPL 291 is immediately adjacent to OML 127 which contains the Agbami and Ikija fields, operated by Chevron and OPL 242 operated by Devon Energy. OPL 291 was tendered by the Nigerian government under the 2006 mini bid round and was recently awarded to Starcrest. The block is made up of the relinquished area of OML 127 before the development of the Agbami field in OML 127 by Chevron.
The companies will make an initial invest investment of $75 million covering the work commitment which comprises the acquisition of 3D seismic and the drilling of one well. The pair has also entered into a Memorandum of Understanding with NNPC to invest in an Independent Power Project (IPP) which would be developed with gas from any commercial production resulting from the exploration of OPL 291.
Addax under the farm-out agreement is obligated to pay 100% of the signature bonus to NNPC. The company also will pay Starcrest a farm-in fee of $35 million and also pay the Nigerian company’s share of OPL 291 exploration and development costs which will be reimbursed to Addax Petroleum from Starcrest’s share of production revenues.
Commenting on the signing of the PSC, Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said, "The addition of OPL291 to our deepwater exploration portfolio is truly exciting. The highly prospective nature of the property is underlined by its proximity to the nearby world-class Agbami oil field which is currently under development. We believe that OPL291 offers significant potential to our company and its shareholders
