Canadian Natural Resources Limited (CNR) and Total E&P South Africa BV will jointly explore Block 11B/12B offshore South Africa. The farm-out agreement will provide Total with a 50 percent working interest in the block and the right to operatorship, with CNR receiving an undisclosed upfront cash payment, a recovery of 50 percent of past incurred costs and a carry in the first exploration well drilled, up to a maximum of $150 million.
CNR has performed seismic studies on Block 11B/12B and now the newly formed consortium will work towards finalizing the location of the initial exploration well. Drilling is slated for 2014.
The Calgary-based energy firm chose Total after a "lengthy and thorough process" because of its expertise in deep water exploration.
"The exploration potential in this offshore area of South Africa is exciting,” commented Steve Laut, president of Canadian Natural, in a press release. “We are pleased to have the opportunity to work together with Total, a world class partner. The completion of this joint venture demonstrates the opportunities provided to the company through its international portfolio which contributes to our vast and diversified asset base. Working together with Total and the Government of South Africa, we are in a positive position to maximize shareholder value in this exciting prospect."
Situated in the Outeniqua Basin, Block 11B/12B lies 109 miles off the southern coast of South Africa and spans 4.6 million acres. Water depths range from 656 to 5,905 feet.
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