Under the terms of the Farmout Agreement (FOA) Oriental executed with Mobil and NNPC on May 9, 2006 and May 26, 2006 respectively, Oriental, a leading Nigerian oil independent, is now the Operator of the Okwok Field, an offshore oil field originally discovered and partially appraised in 1968 by Mobil and NNPC. In 2001, Mobil contributed the Okwok field to Nigeria's Marginal Field Program which was established by the federal government to encourage more Nigerian company participation in the oil and gas sector. Oriental will be joined in the project by Addax Petroleum (Offshore Nigeria) Limited ("Addax Petroleum"), as Technical Advisor who, pursuant to a Joint Venture Agreement, will own a 40% participation interest when approved by the Nigerian government. Addax Petroleum is the Operator of the adjacent OML 123, currently producing in excess of 50,000 barrels of oil per day, and located immediately north of the Okwok Field.
Alhaji (Dr.) Mohammed Indimi, Executive Chairman of Oriental, said, "We are pleased to have concluded the Okwok farmout with Mobil and NNPC, and are equally delighted to have Addax Petroleum join with us in the project, as we move forward with our plans to fast track Okwok to early oil production. Addax Petroleum is Nigeria's leading independent oil producer, and has enjoyed tremendous success growing their OML 123 oil production just a few miles from Okwok. We look forward to a fruitful cooperation with Addax Petroleum as we jointly develop the Okwok Field."
Oriental and Addax Petroleum plan to drill up to three appraisal wells in the Okwok Field with the GSF High Island IX drilling rig, commencing in June 2006, to confirm the commercial potential of the field. A total of four wells were previously drilled in Okwok, three by Mobil/NNPC and one by Oriental/Conoco. Of these prior wells, two wells encountered several petroleum-bearing sands of significant thickness, but the wells were not production tested. The Okwok Field is defined by these wells and by recent 3D seismic data. If warranted, the new appraisal wells to be drilled by Oriental and Addax Petroleum will be production tested to confirm reservoir producibility and crude oil characteristics.
A successful appraisal program by Oriental and Addax Petroleum will be followed by field development operations. First commercial oil production from Okwok could commence as early as 2008.
Oriental was assisted by Sovereign Oil & Gas Company II, LLC of Houston, Texas, in obtaining the farmout from Mobil-NNPC and in arranging the farm-in with Addax Petroleum.
Oriental Energy Resources Limited is a privately held, Nigerian oil exploration and production company with its headquarters in Abuja, the Federal capital of Nigeria. In addition to the Okwok Field, Oriental is the operator of OML 115, an oil mining lease located near Okwok in southeastern offshore Nigeria.
Addax Petroleum is an international oil and gas exploration and production company focused on Africa and the Middle East. It is the largest independent oil producer in Nigeria and has increased its crude oil production from an average of 8,000 barrels per day for 1998 to approximately 80,000 barrels per day for the first quarter of 2006. In Nigeria, Addax Petroleum has a 100 percent interest in two Production Sharing Contracts for Blocks OML 123 (offshore), OML 124 (onshore), OPL 90 and OPL 225 (offshore). The Okwok Field, which is located immediately south of OML 123, represents the first farm-in for Addax Petroleum in Nigeria.
Sovereign Oil & Gas Company II, LLC is a Houston-based international upstream project developer with world-wide experience specializing in West Africa. Sovereign has completed nine major upstream property transactions in the Gulf of Guinea in recent years involving bonuses and work commitments totaling approximately US$400 million, with a focus on assisting local upstream asset owners in Nigeria obtain partners and financing.
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