The Farmout Agreement provides for Hardman to earn a 50% interest in the Ruvuma Production Sharing Agreement in exchange for funding 100% of the costs of an onshore 2D seismic survey, at an estimated cost of US$3 million. The interests in the Ruvuma PSA will be Ndovu with 50% and Hardman with the other 50%.
Hardman will be appointed Operator of the PSA upon completion of the earning commitment and Hardman will provide technical support during the seismic acquisition program. The Farmout Agreement and subsequent change of operatorship is subject to formal Tanzanian government approval.
The Ruvuma PSA is located approximately 500 kilometers south of Dar es Salaam, along the Mozambique border and comprises the Mtwara and Lindi licenses. The licenses cover a total area of 12,360 square kilometers over the onshore and adjacent nearshore, Tanzanian portion of the Ruvuma Basin. The area is adjacent to the Mnazi Bay gas field, discovered in the 1980's and currently under development. The area was last explored in the 1980's and prior to the recent activity less than 1,400 kilometers of 2D seismic had been recorded. Numerous leads have been identified by previous operators from this data, many with potential in excess of 100 million barrels. Initial targets will be Tertiary and Cretaceous reservoirs expected at depths of 1,000 to 3,000 meters. Oil seeps are known in the area.
The Ruvuma Basin attracted significant interest in the recent Mozambique bidding round with nearshore and shallow water licenses attracting bids with work commitments of seismic and up to seven wells.
Ndovu acquired approximately 350 kilometers of new 2D marine seismic within the nearshore portion of the PSA area in late 2005, and initial results are very encouraging. The onshore seismic survey is expected to comprise approximately 500 kilometers of data and is scheduled to be carried out during 2006 with a view to firming up drilling targets for the joint venture's first exploration wells in this area.
Hardman's Managing Director and CEO, Simon Potter, commented: "This entry into Tanzania allows us access to a new and exciting frontier with significant potential. We plan to leverage our experience as an operator of wells and onshore and offshore seismic acquired in our successful Ugandan project. This gives us an opportunity to build a new focus area in East Africa."
Aminex PLC is an upstream oil and gas company listed on the London and Irish Stock Exchanges and is currently the Operator of exploration licenses in Tanzania, Madagascar, North Korea, and Egypt and production in the United States of America.
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