Under the terms of the agreement, Plectrum will acquire 90 per cent. of the issued share capital of REAP Tunisia, the entity holding the 50 per cent interest in the Nabeul Block. Consideration for the acquisition is a cash payment of £250,000 and the agreement to spend £2.5 million on a work program. The Vendor will also retain an overriding royalty interest in the permit.
The Nabeul Block is located in the Gulf of Hammamet, adjacent to existing oil producing concessions, in water depths of 250-800m. The Block covers 3352 km(2) (equivalent to 13 North Sea Blocks) and the initial Prospection Permit phase runs until 24th January 2008. Three further exploration periods of up to 5 years each are also available. The proposed work program includes the reprocessing of existing seismic data, the acquisition of a conventional modern 2D seismic grid and modelling to confirm the suitability of Electro Magnetic (EM) imaging and Marine Magnetotelluric (MMT) in the Block.
Final completion of the transaction is subject to the approval of the Tunisian authorities. Upon completion Plectrum will have a 50 per cent. working interest as operator. Entreprise Tunisienne d'Activites Petrolieres ("ETAP"), the Tunisian Oil and Gas government company, has the other 50 percent. interest.
Mike Whyatt, Plectrum's Executive Chairman, commented:
The acquisition of this highly prospective North African exploration acreage demonstrates the viability of the Company's business model of identifying attractive frontier exploration opportunities. Several prospective structures have already been identified in the Birsa sand fairway play in the Block that are capable of trapping oil volumes in excess of 100 mmboe. In due course our goal will be to better define these potential volumes prior to committing to an exploration well.
We look forward to working with ETAP and using this acquisition as a platform for further expansion in this exciting, proven petroleum province."
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