Syntroleum along with Challenger Minerals, Providence Resources, Energy Equity Resources Ltd, Yinka Folawiyo Petroleum ("YFP") have agreed to pursue the drilling of an additional appraisal well (Aje-4) on OML 113 off the western coast of Nigeria. Lundin Petroleum and Palace Exploration Company have opted not to participate in the drilling of Aje-4. As a result, YFP, the Nigerian firm which holds the rights to OML 113, and Syntroleum are in active discussions with several additional companies interested in joining the participant group. Under the original joint venture agreement with YFP, Syntroleum and its partners have until April 5, 2007 to commence drilling the Aje-4 well, subject to rig availability. The Aje field was discovered in 1996 with the drilling of the Aje 1 and 2 wells which tested a combined rate of 6255 bpd of oil and 1729 bpd of condensate and 66.7 million cubic feet of gas per day. Since the drilling of the Aje-3 well, the participant group has re-processed the 3-D seismic and conducted a new evaluation of the reprocessed data. This work combined with the results of the Aje-3 well have led to agreement among those participants who have elected to pursue an additional well on the proposed location for the Aje-4 well.
"We are encouraged by current discussions with other experienced companies that may be interested in working with us in Nigeria," said Jack Holmes, president and CEO of Syntroleum. "Syntroleum, Challenger Minerals, Providence Resources, Energy Equity Resources Ltd and YFP are optimistic about the commercial prospects of Aje-4."
"We believe the Aje field is a commercial discovery which can be economically developed due to the rapidly improving gas market in Nigeria and the rich yield of condensate and LPG in the gas," said Tunde Folawiyo, managing director of YFP. "We look forward to working with the existing group and their new partners to expedite the development of this asset."
Syntroleum Corporation owns a proprietary process for converting natural gas or synthesis gas derived from coal and other carbon-based feedstock into synthetic liquid hydrocarbons. The company plans to use its technology to develop and participate in natural gas and coal monetization projects in a number of global locations.
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