Genel Energy announces that it has agreed to farm in for 50 percent of Jacka Resources Limited's ("Jacka") license interests to explore for and produce oil and gas in the Odewayne Block, Somaliland ("Odewayne") (the "Transaction"). As part of the Transaction, Genel Energy will assume operatorship.
Under the Transaction, Genel Energy will acquire 50 percent of Jacka's participating interest in the Odewayne Production Sharing Agreement ("PSA"). Jacka will retain a 30 percent interest and the remaining 20 percent interest is held by Petrosoma. The consideration comprises an initial payment of $0.67 million to Jacka in recognition of past costs plus a 100 percent carry of Jacka and Petrosoma for the exploration work program required under phases III and IV of the PSA. This program includes a minimum of 932 miles (1,500 kilometers) 2D seismic and the drilling of one exploration well. These will be funded from the Company's existing cash resources.
The Odewayne Block covers block SL6 and part of blocks SL7 and SL10, onshore Somaliland. It comprises an area of 8,494 square miles (22,000 square kilometers) enclosing a Jurassic/Cretaceous rift basin. An active petroleum system has been demonstrated by numerous oil seeps on the block confirming that the area is underpinned by a working hydrocarbon system, which is believed to be analogous to the nearby producing basins in Yemen. A recently commenced airborne gravity and magnetic survey will be used to design an extensive 2D seismic acquisition program to be initiated in 1Q 2013.
The Transaction is conditional on the receipt of approval from the Government of Somaliland.
Commenting on the transaction, Dr. John Hurst Chief Operating Officer of Africa for Genel, said:
"We are delighted to have farmed in to the Odewayne Block, substantially increasing our acreage position in Somaliland. This block, together with our SL10/13B acreage, means we have built a strong position in an exciting frontier exploration area. Such frontier exploration opportunities, with a very realistic possibility of finding large volumes of hydrocarbons, are increasingly rare. We look forward to commencing our exploration program which will lead to spudding of our first well by mid-2014."
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