Mediterranean Oil to Gain Stake in Medjerda Block


Merdjerda Block
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Mediterranean Oil and Gas is acquiring a 25-percent interest in the Medjerda Block in Northern Tunisia from Carthago Oil.

"We are looking forward to the exploration potential in this very large onshore block that has similar geological settings to the Italian areas where Mediterranean Oil & Gas has long-standing experience and expertise in the E&P business," said Giovanni Catalano, Mediterranean's CEO. "The combined experience of the joint venture with Range Petroleum and Carthago will help to properly evaluate the potential of this relatively unexplored area of Tunisia." Range is the operator.

The pending agreement, which will require approvals from Range and the Tunisian government, contains the following stipulations:

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  • Malta Oil, a wholly owned subsidiary of Mediterranean, will free carry Carthago for 10 percent of the block license cash contributions (100 percent basis) in respect to the first and second wells to be drilled on the license, along with seismic and related work. Malta's total liability to free-carry Carthago’s 10-percent interest will be capped at US$ 1 million.
  • Should the joint venture partners declare a discovery that the Tunisian regulaory authority ETAP deems commercial, Mediterranean within 30 days of the announcement will pay Carthago the lesser of US$2 million or 25 percent of Carthago's audited past direct license-related costs.

The Medjerda block is located onshore Northern Tunisia and covers a surface of 4,956 square kilometers thattt results from the 2004 merger of the former Medjerda and Tabarka exploration acreages. According to Mediterranean, seismic and geological works carried since 1995 have defined several prospects and leads in several geological "domains" that constitute the geological subdivisions of the block.

Range and Carthago have identified the Teboursouk prospect and matured it to drillable status. Mediterranean's board believes that the first well could be spud in the fourth quarter of this year.

Mediterranean said that the prospect's development cost would be low, given its proximity to the Bizerte refinery and the favorable fiscal regime. The company contends that the threshold for an economical discovery on the block is approximately 10 MMbbls based on an oil price of US$20/bbl.

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