Savannah Petroleum announced Friday that it has signed a Production Sharing Contract (PSC) with the government of Niger for the country’s R3/R4 license area.
As part of the deal, a signature bonus payment of $28 million will soon be made to the state of Niger. Savannah has already mapped 29 leads across the R3/R4 PSC area with a range of closure sizes similar to existing discoveries in the basin, according to a company statement. Under the PSC for the R3/R4 license area, the state of Niger’s public participating interest in the region will be set at 15 percent.
The minimum work program for the area requires the acquisition of 289 square miles of 3D seismic data and the drilling of two wells during the initial period of the exclusive exploration authorisation (EEA), 193 square miles of 3D seismic and two wells during the first renewal period of the EAA and 96 square miles of 3D seismic and two wells during the second renewal period of the EAA.
Andrew Knott, CEO of Savannah Petroleum, commented in a company release:
"The signing of the R3/R4 PSC is another landmark transaction for Savannah. We have now licensed circa 50% of the Agadem Rift Basin, which the board believes places the company in a very strong position for the future given our assessment of the scale, risk profile and cost structure of our assets. I would again like to thank the government of Niger for awarding the PSC to us, and for their support over the past three years. Savannah will now move to commence what we expect to be an aggressive exploration program over our licenses which we hope will deliver material benefits for all of our stakeholders over the coming years."
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