Transeuro Energy Acquires Petroleum License in PNG
|Monday, February 14, 2005
Transeuro Energy has entered into an agreement to acquire a Petroleum Prospecting License (PPL 260), covering an area of 1,541,196 acres, located in the Papuan Fold Belt of Papua New Guinea ("PNG"). The license was acquired from Rockwell Explorations S.A. in an arms length transaction. As consideration for the license, TSU will issue to Rockwell 300,000 common shares of Transeuro and pay a cash payment of $80,000 US. Transeuro's interest will be no lower than 76.5% under the current agreements and possibly as high as 98% if the government of Papua New Guinea elects not to take its option to purchase 22.5% equity in the project. The common shares will be subject to at least a four month hold period.
Transeuro believes that the area is geologically similar to other concessions in the Papuan Fold Belt, which have proven reserves in place totaling 15 trillion cubic feet of natural gas and present daily production of approximately 50,000 barrels of sweet crude oil. Specifically, PPL 260 is contiguous to PDL1 (Petroleum Development License) owned by Oil Search (ASX: OSH), Exxon Mobil (NYSE:XOM) and Santos (ASX: STO) and PRL 11 (Petroleum Retention License) owned by Exxon Mobil & Oil Search which have between them an indicated 5 trillion cubic feet of natural gas. Due south 9 km is PRL 02 owned by Oil Search, Exxon Mobil and Japan PNG Petroleum that has a reported 3 trillion cubic feet of gas reserves. Forty-five km south of the license being acquired by TSU is the pipeline that connects the prolific Kutubu field to the pipeline that runs to the offshore Kumul terminal in the Torres Strait between Australia and PNG. At present, the offshore terminal is being used for the loading of tankers with crude oil transported by the pipeline for market. Gas production is currently locked in, pending the successful completion of a proposed gas pipeline to Australia.
In addition to the substantial capital expenditures for exploration and production in the PNG region by some of the world's largest Oil and Gas companies, Oil Search has recently stated that it plans to spend up to $400 million on exploration and development in the area. Interoil has committed $40 million for exploration and development in addition to the $100 million plus it has expended for the building of a refinery in Port Moresby, the capital of Papua New Guinea.
"Transeuro's license purchase in this prolific hydrocarbon bearing area of Papua New Guinea encompassing in excess of 1,500,000 acres, in addition to the company's current land holdings in Armenia totaling in excess of 11,000 sq. kilometers and its current development program in the Ukraine, places the company well on its way to achieving its goal of becoming a world class oil and gas exploration company," stated company Director, David Parry.