All articles in the Farm in, Farm Out Section:


Vanoil Receives Extension On Kenyan PSC

Vanoil Energy Ltd. has received the seven month extension to its PCS it requested from the Kenyan Ministry of Energy. This extension extends the contract for Blocks 3A and 3B from September 30, 2012 to April 30, 2013.
The extension allows Vanoil to complete the analysis of 100 sq km of high resolution 3D seismic data designed to geologically pin point its initial drill site location. The mobilization was expected to be completed in early August
2012 and data acquisition to be started mid-August and completed in early-October.

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Algeria Applies To Join The Shale Gas Club

Algeria, located squarely in water –starved desert terrain, has become the first African country to officially sanction exploration and exploitation of Shale gas in its petroliferous basins.
Nine months after signing a cooperation agreement with ENI, the country is pleading with Anglo Dutch major Shell and US behemoth ExxonMobil to bring their technologies for the development of unconventional oil, with particular focus on shale gas. Negotiations with those two companies are ongoing.

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Tunisia Hands Out Two DualEX and Alpine Oil&Gas Get Pieces of The Pie

Tunisian authorities handed out two exploration permits in September, 2009. On September 11, they granted the Bouhajla Permit, to ETAP as Holder and to DualEX, a Canadian petroleum company, as Contractor. The 416 sq km onshore acreage was granted for an initial period of three years, with two renewal period of three years each, and a commitment of a seismic acquisition and an exploration well for each mentioned period.

On September 18, the acreage known as Chorbane, (which had been converted into an exploration permit from a prospecting permit), was granted to ETAP as Holder and Alpine Oil and Gas, an Australian petroleum company, as Contractor. It is situated in Central Tunisia and covers an acreage of 2428 sqkm. The contract allows an initial period of three years with two renewal periods of three years each, during which the Contractor commitments are to drill an exploration well, each mentioned periods


Tullow Will Buy Out Heritage

UGANDA

UK listed Tullow Oil has exercised its right of pre-emption in respect of the proposed sale by Heritage Oil & Gas Limited (“HOGL”) of its 50% interest in Blocks 1 and 3A in Uganda.

“Tullow Uganda will enter into a Sale and Purchase Agreement (“SPA”) with HOGL, a subsidiary of Heritage Oil plc (“Heritage”)”, the company said in a statement.. On 18 December 2009, Heritage announced that the consideration for the transaction comprises $1.35 billion cash and a further contingent, deferred consideration of either US$150 million cash or an interest in a mutually agreed producing oil field independently valued at a similar  amount. A syndicate of Tul1ow’s-core-re1ationshi-banks- has provided the banking facilities required to enable Tullow to exercise its right of pre-emption. Completion of the SPA is subject to certain conditions which include approval by Heritage shareholders at a meeting scheduled for 3pm (GMT) on 25 January 2010 and receipt of necessary consent from the Ugandan Government.

“In parallel with exercising its pre-emption right, Tullow has been running a transparent farmout process which has attracted a significant amount of interest from major international and national oil companies. The process is now well advanced and potential partners are supportive of the Group’s decision to pre-empt.


TANZANIA: Cove Gets Rovuma Permit

Cove has received all necessary consents and approvals including the consent of the Government of the Republic of Mozambique, as represented by the Minister for Mineral Resources and Empresa Nacional de Hidrocarbonetos E.P. (“ENH”), required pursuant to the farm-in agreement entered into by Cove together with Maurel & Prom (“M&P”) for the acquisition by Cove from Artumas Group of a 10% participating interest in the Exploration and Production Concession Contract (“EPCC”) in the Rovuma Onshore Area, Mozambique.

Cove also holds a conditional 8.5% interest in the contiguous Mozambique Rovuma Offshore Area, where drilling operations have recently commenced. This is subject to approval of the Government of the Republic of Mozambique.


Shell To Pick Up Hess’ Assets In Gabon

Shell has agreed to acquire Hess Corporation’s entire upstream portfolio in Gabon and its interest in the Clair Field, which lies in British waters west of the Shetland Islands. In return, Hess would acquire Shell’s interest in a pair of Norwegian offshore fields, Valhall and Hod. This transaction is a strategic trade and no cash payment is involved.

“We are very pleased to increase our equity stake in Gabon-a country in which we have operated with great success for nearly 50 years”, said Malcolm Brinded, Executive Director of Shell’s Upstream International Business. The swap, which is still subject to government approval and other requisite consents, would rearrange the companies’ ownership interests in Gabon, the UK and Norway. Shell’s interest in its Gabonese production licenses would increase from 42.5% to 52.5% in Rabi-Kounga, from 44.3% to 94.3% in Toucan and from 20% to 60% in Atora. Its interest in the Ozigo exploration license would increase from 44.3% to 94.3%


…Shell Grabs A Chunk Of Alam El Shawish West.

Shell Egypt received ministerial approval to effect agreements signed with Vegas Oil & and Gas and GDF SUEZ to acquire a 20% interest from each in the Alam El Shawish West Concession, in the Western Desert area. Within the consortium, Shell Egypt will hold 40% and will become the operator, Vegas 35% and GDF SUEZ 25%. There are existing oil and gas discoveries in the concession with plans in place to boost production.

‘Farming-in into this block fits within our p1ans to expand Shell’s activities and investment in Egypt. As operator of the concession, our technical and operational expertise and established Western Desert infrastructure will allow us to create maximum value for the country and all partners”, said Ahmad Atallah, Chairman Shell Companies in Egypt.

Shell companies in Egypt, are wholly owned by Royal Dutch Shell plc. Active in Egypt. since 1911 , Shell Egypt business today spans Upstream Oil and Gas Exploration & Production, Downstream marketing and gas distribution. Most of Shell’s upstream operations are located in the Western Desert. However, Shell’s business portfolio also includes stakes in the offshore Nile Delta concessions of North West Damietta, North Damietta and the ultra deep water North East Mediterranean (NEMed).


EGYPT: Sea Dragon Takes Part of Kom Ombo

Sea Dragon Energy has signed a Farm- out Agreement with Dana Gas Egypt Ltd, to acquire a fifty (50%) percent participating interest in the Kom Ombo (Block-2) Concession, located approximately 1,000 km south of Cairo on the West Bank of the Nile River. The Kom Ombo (Block-2) Concession, covering approximately 11,446 sqkm, is held by Dana Gas, which is the successor company to Centurion Energy International Inc. who was originally awarded the Kom Ombo (Block-2) Concession.

The total consideration paid by Sea Dragon to DGE is $45million subject to working capital adjustments. This consideration is to be paid in full by April 30, 2010.

The acreage contains the Al-Baraka Development Lease, comprising the Al-Baraka oil field, which has a discovered, undeveloped oil accumulation of approximately 100 million barrels of Original Oil in Place as Discovered Resources in two productive zones, according to Sea Dragon’s internal estimates.

Sea Dragon’s acquisition of a participating interest in the Kom Ombo (Block-2) Concession is subject to the consent and approval of the responsible authority. Four wells were drilled in the field of which three wells are currently on production at approximately 850 barrels of oil per day (BOPD).

Approximately $20million shall be cost recoverable by Sea Dragon out of future production revenue. As owner of a 50% participating interest in the Kom Ombo (Block-2) Concession, Sea Dragon will be required to pay its 50% share of future expenditures and is entitled to receive a 50% share of all future production revenues and 50% of all cost recoveries as specified in the Concession Agreement. Under the terms of the Farmout Agreement, Sea Dragon and DGE will jointly operate the Kom Ombo (Block-2) Concession.


TOTAL Expands Portfolio In Algeria

ALGERIA: TOTAL and partner Partex have been awarded a 49% interest in the Ahnet license, as part of the second bid round held by the Algerian National Oil and Gas Development Agency (ALNAFT).

Located near In Salah in southwestern Algeria, the Ahnet exploration and development acreage covers an area of 17,358 square kilometers in which twelve natural gas formations have already been discovered.

TOTAL holds a 47% interest and will appraise and develop the Ahnet finds with partners Partex (2%) and Sonatrach (51%).

A development plan will be submitted for approval before mid 2011, with first gas scheduled for 2015. The Ahnet license contains significant reserves (approximately 500 billion cubic meters of gas) which should produce at least 4 billion cubic meters a year, as per the contract with Sonatrach.

This latest project is a developmental milestone in the new southwestern Algeria gas province, which is also home to the Timimoun project operated by the consortium Sonatrach, TOTAL and Cepsa.

It further cements TOTAL’s commitment to investing in Algeria in both the natural gas upstream and petrochemicals.

TOTAL’s production in Algeria comes from direct interests in the Tin Fouyé Tabenkort gas field, and from the Group’s 48.83% stake in CEPSA, which is partnered with Sonatrach on the Ourhoud and Rhourde El Krouf  fields.


THOSE WHO ARE BUYING

GUINEA

Dana Farms In To Guinean Block UK based Dana Petroleum and US Independent Hyperdynamics Corp. have signed an exclusive letter of intent (LOT) for Dana to gain an interest in the Texas company’s 80,000 sq km concession offshore the Republic of Guinea.

The LOI positions Dana to potentially acquire a 23% working interest in the large concession which encompasses all of offshore Guinea, an area equivalent to 330 UK blocks.

The LOI contemplates Dana and Hyperdynamics signing definitive binding documents no later than December 31, 2009. During this period, Hyperdynamics is legally committed to deal exclusively with Dana with respect to this 23% interest.

Hyperdynamics intends to bring in to the concession a further significant partner with strong financial and technical capability. Dana has the option to negotiate for an additional interest of up to a further 27% (to give Dana a total of 50% interest) if Hyperdynamics does not sign a letter of intent with another potential partner by November 30, 2009.

Hyperdynamics first officially announced its intent to farm-out a portion of its Guinea acreage in January 2007. Since that time the company has opened up its Houston data room and made presentations in numerous venues including Calgary and Houston, and retained the services of advisors such Zeus Development Corp. to assist in attracting potential farm-in partners.

Hyperdynamics has recently signed a new MoU with the government of Guinea which confirms Hyperdynamics’ title to the Production Sharing Contract (PSC). It requires relinquishment of 64% of the current acreage by end 2009 and a review of the existing PSC by end March 2010.

GHANA

Ghana Is Angry At ExxonMobil, Ghana’s petroleum authorities are dissatisfied with the ways and means by which ExxonMobil, the world’s largest corporation, is trying to gain a foothold in the continent’s newest offshore exploranon play. Kosmos confirmed it had entered into an agreement with ExxonMobil but the Ghanaian government has said that the agreement is illegal and will not honor it.

“We have formally notified (Kosmos) that we do not recognize whatever agreement they reached with ExxonMobil – we told them we disapprove of it because it’s illegal,” a GNPC source was quoted as saying last week. The source said Kosmos had violated Ghanaian laws when it shared confidential exploration data with over 20 companies for its own commercial purposes without giving GNPC any prior notification.

…Wants To Buy Kosmos Jubilee Stake

Ghana National Petroleum Corp. has the funds to buy a stake in the Jubilee oil field from Kosmos Energy LLC, according to Kwame Ntow Amoah, head of economic evaluation and monitoring at the state-hydrocarbon company.

Ghana National, also known as GNPC, is in talks with Kosmos about the price and other issues and has secured the money from “at least two” banks, he said today by mobile phone from Accra. He declined to name the lenders or comment on the price.

GNPC will consider proposals from potential partners once the purchase is complete. he said. “The Chinese, the Americans, the British, all of them are welcome to bring proposals and we will look at them at the second stage,” Amoah said. GNPC could choose one company to work with or a combination of partners, he said, adding that there isn’t a date by which a decision on the sale must be made.

Ghana’s nascent oil industry, still a year away from production of oil for export, has attracted attention from some of the world’s top energy companies. British Petroleum too has been counted as one of those interested in Kosmos’ stake in Jubilee. In early October 2009, Kosmos said it had agreed to sell its Ghanaian assets, including its 23.49 percent stake in Jubilee, to Exxon Mobil Corp. for $4 billion. Ghana’s government disapproves of the agreement and is still in negotiations with Kosmos. Reserves estimates of Jubilee he has been said to range from 750MMBO to 2Billion by all sorts of analysts. GNPC already has a 13.75 percent stake in the field.

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