The Company announces that its subsidiary, SOCO Exploration and Production Congo ("SOCO EPC"), has signed a production sharing contract with Société Nationale des Pétroles du Congo ("SNPC") wherein it has acquired an interest in the Marine XI block, offshore the Republic of Congo (Brazzaville). SNPC was confirmed as licensee of Marine XI by an 18 July 2005 Presidential decree.
SOCO EPC will be the operator with a 75% working interest in the block. The exploration and production branch of SNPC (15%) and AFRICA OIL & GAS CORPORATION (10%) hold the remaining interests. The block, located in the Lower Congo Basin, is in shallow water adjacent to the coast with water depths ranging up to 110 metres and covers approximately 1, 400 square kilometres. There has been previous exploration activity on the block resulting in four small oil discoveries, the largest of which has initial recoverable reserves estimated to be in the 20 million barrel range.
The previous discoveries are in the shallower horizons of the sedimentary section in Marine XI. The deeper section, productive onshore and on trend to the south in Cabinda, has not been adequately evaluated as it could not be accurately mapped using older seismic data. By employing the modern seismic techniques that the Company successfully applied in Vietnam to map the Basement reservoir, SOCO EPC expects to exploit the potential of the deeper section. As exploration in West Africa moves into ever deeper waters, the application of new technology provides access to significant reserve potential in underexplored shallow water areas
Ed Story, President and Chief Executive of SOCO, commented:
"We are extremely pleased to be participating with SNPC in this very prospective block. In our view, Marine XI offers the same potential for exponential exploration reserve growth that we are currently demonstrating in Vietnam and Yemen. We are pleased to have Marine XI as one of the cornerstones of what we expect to become an important new core area for SOCO."
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