Commenting on the acquisition Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said, "We are delighted to conclude our participation in Okwok and value the opportunity to partner with Oriental. We believe that we are the natural partner for Oriental given the proximity of this opportunity to our infrastructure in OML123. This opportunity fits very well with our strategy of business growth in Nigeria and maximizing our infrastructure assets."
In return for obtaining a 40 percent participating interest in the Okwok field, Addax Petroleum is obligated to pay a farm-in fee and to carry Oriental's appraisal and development costs on the Okwok field until first oil and thereafter be repaid from part of Oriental's entitlement of oil production.
The Okwok field is located south of the OML123 in a water depth of approximately 50 meters. The field was discovered in 1967 and was appraised soon thereafter by a further two wells but was not production tested. In 2001, Mobil contributed the Okwok field to Nigeria's Marginal Field Program which was established by the Nigerian government to encourage more Nigerian company participation in the oil and gas sector. Pursuant to this program, Oriental recently completed a farm-in agreement for the Okwok field with Mobil and the Nigerian National Petroleum Corporation. Addax Petroleum and Oriental plan to drill up to three appraisal wells in the Okwok Field with the GSF High Island IX drilling rig, commencing in early July, 2006 to confirm the commercial potential of the field. 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.
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