Petsec Energy Ltd. disclosed Friday that it has executed an agreement with Oil Search Ltd. to acquire all the shares of its subsidiary Oil Search (ROY) Ltd. which holds a 34 percent participating interest in Block 7, Al Barqa Permit, in the Republic of Yemen, and is the designated operator of the Block.
The Oil Search agreement follows the agreements executed in 2014 with AWE Ltd. (21.25 percent) and Mitsui E&P Middle East B.V. (8.5 percent) to acquire their respective Participating Interests in Block 7. The acquisition of Oil Search (ROY) Ltd. (OSROY) increases Petsec's overall Participating Interest in Block 7 to 63.75 percent, and Petsec will assume operatorship of the Block.
Completion of the transaction is subject to customary approvals from the Government of Yemen, the Ministry of Oil and Minerals.
Block 7 is an onshore exploration permit covering an area of 1,235,527 acres (5,000 square kilometers) located approximately 211 miles (340 kilometers) east of Sana'a, the capital of Yemen. The block contains the Al Meashar oil discovery as well as an inventory of leads and prospects defined by 2D and 3D seismic surveys with significant oil potential.
Petsec Energy's Chairman, Terry Fern, commented on the Agreement:
"The acquisition of OSROY and the assumption of the operatorship of Block 7, Yemen is an important strategic milestone towards the Company's objective of building a significant presence in the Middle East and North African (MENA) region. The enlarged interest will provide a meaningful exposure to high value oil assets within a region that is highly prospective for oil. Block 7 has the potential to add significant oil reserves to the Company's resource base and signicant value to the Company's shareholders. The Company looks foward to the early appraisal of the Al Meashar oil discovery and exploration of the remainder of the Block. Petsec hopes to build upon this investment in the Republic of Yemen by seeking further reserve development acquisitions in the MENA region."
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