Hoifu Completes Acquisition of Madagascar Northern Petroleum

Hong Kong-listed Hoifu Energy Group Limited completed the acquisition of the entire issued share capital of Madagascar Northern Petroleum Company Limited (MNPC), which owns 100 percent of the exploration, development and operations rights of Madagascar oil field Block 2101 in northern Madagascar.

MNPC, a wholly owned subsidiary of Hoifu following the completion of the acquisition July 22, signed a Production Sharing Contract (PSC) for Block 2101 with the Office des Mines Nationales et des Industries Stratégiques Oct. 12, 2006.

Block 2101 covers a total area of 4,015 square miles (10,400 square kilometers) in northern Madagascar. Under the PSC, MNPC will engage in oil and gas exploration for 8 years (with possible extensions of 2 years and 5 years for oil and gas, respectively) and development and operation of oil for 25 years (with possible extension of 5 years) and gas for 35 years (with possible extension of 10 years) at Block 2101.

"Depending on the rate of liquid petroleum production of Madagascar oil field Block 2101, MNPC will share the remaining petroleum profit after government royalty and recovery of petroleum costs according to the sharing ratios in the range of 40 percent to 72.5 percent as set out in the Exploration, Exploitation and Oil and Gas PSC. MNPC owns 100 percent of the exploration, exploitation and operations rights as well as the Profit Sharing Right of Madagascar oil field Block 2101," Hoifu Energy Chairman Hui Chi Ming said in a company release.

MNPC, which has not carried out any exploration works at Block 2101, plans to commence relevant works for the exploration, development and operations at the acreage.


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