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Addax Petroleum Acquires Shallow Water Exploration License in Nigeria
Addax Petroleum Corporation awarded a 40 percent interest in Oil Prospecting
License (“OPL”) 227, offshore Nigeria. Addax Petroleum’s co-participants in
the OPL227 license area are Express Petroleum & Gas Company Limited
(“Express”) and Petroleum Prospects International Limited (“PPI”), both of
which are indigenous Nigerian oil companies. The OPL227 license area is
located in the shallow water offshore of the western Niger Delta Basin, one
of the most prolific petroleum basins in the world.
Commenting, Jean Claude Gandur, President and Chief Executive Officer of
Addax Petroleum said: "Addax Petroleum continues to demonstrate its
commitment to Nigeria and add to its extensive exploration portfolio with
this acquisition. Exploration in our core area of Nigeria is a cornerstone
to Addax Petroleum’s growth strategy and we are excited to be acquiring a
substantial interest in a license that is in a highly prospective area but
has seen very little modern exploration activity to date. We are also
pleased that Addax Petroleum has been selected by Express and PPI to be
their partner of choice for OPL227 and we look forward to working more
closely with both organizations.”
The OPL227 license area covers approximately 851 km2 (210,300 acres) and is
adjacent to and to the north-east of the Shell-operated OML79 license area.
OML79 contains Shell’s EA field development which is reported to have
commenced production in 2002 and to contain approximately 350 MMbbl of
remaining recoverable oil. There have been four wells drilled in the OPL227
license area, all between 1974 and 1988, all of which encountered
hydrocarbons in non-commercial quantities or shows. In addition, there has
been minimal 2D seismic and no 3D seismic data acquired on OPL227 to date.
Under the terms of the award, Addax Petroleum received a 40 per cent
interest in OPL227 while Express and PPI received interests of 39 per cent
and 21 per cent, respectively. Express is the operator while Addax Petroleum
will conduct technical operations in its capacity as technical advisor. In
return, Addax Petroleum has paid a farm-in fee to Express and PPI and a
signature bonus to the Federal Government of Nigeria, and is obligated to
fund 80 per cent of a work program comprising a minimum of 500 km2 of 3D
seismic acquisition during the exploration period, while Express will fund
the remaining 20%. Addax Petroleum will also initially fund 80 per cent of
all capital and operating costs on OPL227, with Express funding the
remaining 20 per cent, and will be entitled to a higher than pro-rata share
of the net production from OPL227 until all capital costs have been
recovered after which all parties will be entitled to their pro rata share
of production.
