*****NEWS ADDAX SECURES RIG*******
Addax Petroleum Secures Deep Water Drillship
Tuesday March 6, 6:50 am ET
/NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA OR JAPAN/
Exploration drilling campaign in the Gulf of Guinea deep water to start in mid-2008
CALGARY, March 6 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum" or the "Corporation" or "AP") (TSX: AXC - News), today announces that, through a wholly-owned subsidiary, it has entered into an agreement with Aban Abraham Pte Ltd ("Aban"), a wholly owned subsidiary of Aban Offshore Limited, publicly-quoted on Indian stock exchanges, for the provision of the Aban Abraham deep water drillship to start drilling operations as early as the second quarter of 2008.
Commenting today, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "I am delighted that Addax Petroleum has secured the necessary drilling capability on competitive terms. This contract will enable us to advance our plans to demonstrate the considerable value in our highly prospective Gulf of Guinea deep water exploration portfolio which we have assembled throughout 2006. Our contract with Aban will enable us to complete an extensive exploration and appraisal program which I believe has the potential to realise considerable value for Addax Petroleum, its shareholders and stakeholders."
The contract, which has been entered into jointly by Addax Petroleum and Sinopec, requires Aban to drill up to ten wells in total comprising five firm well slots and five optional well slots. Well slots will be allocated under a separate agreement between Addax Petroleum and Sinopec. It is intended that firm well slots will be allocated to Addax Petroleum to satisfy its minimum work commitments on operated blocks in the deep water Gulf of Guinea. The Aban contract anticipates that the Aban Abraham will start drilling operations as early as the second quarter of 2008 once it has completed a drilling campaign for a third party operator. Payments under the contract are based on a day rate charging structure and a maximum day rate of $410,000, to be allocated appropriately to Addax Petroleum and its relevant co-venturers.
Addax Petroleum holds interests in four deep water licences in the Gulf of Guinea. These are Blocks 2, 3 and 4 in the Joint Development Zone ("JDZ") between Nigeria and the Republic of Sao Tome and Principe and OPL291 offshore Nigeria. Addax Petroleum operates JDZ Block 4 and OPL291 and JDZ Blocks 2 and 3 are operated by Sinopec and Anadarko, respectively. Under the terms of the production sharing contracts for the Addax Petroleum operated properties, the co-venturers have committed to minimum work programs that include three exploration wells on JDZ Block 4 and one well on OPL291. The Aban contract ensures that Addax Petroleum, as operator on behalf of the co-venturers, will have the drilling capacity required to meet its minimum work program obligations. Addax Petroleum's deep water exploration portfolio is summarised in the following table:
Addax Petroleum's Gulf of Guinea Deep Water Exploration Portfolio
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Additional
Addax Interest
Petroleum Carried by Minimum
Participating Net Addax Well
Area Block Operator Interest Acres Petroleum Program
(%) (acres) (%) (gross)
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JDZ 2 Sinopec 14.3% 24,500 7.3% 1
3 Anadarko 15.0% 24,700 10.0% 1
4 AP 38.3% 81,100 17.7% 3
Nigeria OPL291 AP 72.5% 230,600 27.5% 1
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About the Aban Abraham
The Aban Abraham is a deep water drill ship currently undergoing extensive refurbishment and modification at the Sembawang Shipyard in Singapore. The Aban Abraham was built in Holland in 1976 as a world class second generation drillship named the Pelerin. The drillship was operated from 1976 to 2002 in water depths of up to approximately 1,400 metres (4,600 feet) offshore west Africa, Norway, eastern Canada and Brazil and then cold-stacked until 2006 when purchased by Aban. When refurbishment is completed, scheduled for later this year, the drill ship will be capable of drilling in water depths of up to 2,100 metres (6,900 feet) having been upgraded from second generation to fourth generation capability. Once commissioned, the Aban Abraham will undertake drilling operations for a third party operator before starting drilling operations for Addax Petroleum.
About Addax Petroleum
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa and has increased its crude oil production from an average of 8,800 bbl/d for 1998 to an average of approximately 90,000 bbl/d in 2006. Further information about Addax Petroleum is available at www.addaxpetroleum.com or at www.sedar.com.
AI
