In November 2006, Baraka announced a Farm Out Agreement of a 50% interest and Operatorship of the five blocks (1, 2, 3, 4 and 9) in Mali, West Africa to Eni, and a 25% interest to Sonatrach International Petroleum Exploration and Production B.V.I. (SIPEX). Baraka retains 18.75% participating interest in all five Production Sharing Agreements in the Mali blocks, totaling approximately 193,200 sq. km
Under the terms of the farm out agreement, Baraka will recoup all past costs associated with Year 1 and Year 2 of the exploration program, and will be carried for up to US$10 million for Year 3 expenditure program starting on 28 April 2007. Baraka's expenditures to 5 March 2007 (excluding accruals) total approximately US$6.3 million.
The Company also advises that the Joint Venture has submitted its 2007 Work Program and Budget to AUREP for approval. The Work Program and Budget consist of plans to undertake the following additional exploration activities over the next 12 months:
Baraka Managing Director and CEO Max de Vietri said, "We are very pleased with the Malian government's approval of Eni as the successor operator. This will allow for the introduction of a very reputable joint venture partner with a track record as a responsible operator to work with Baraka, and the Mali Government in ensuring the region's exploration potential is developed in the most timely and efficient manner."
Participants in the blocks are Eni as operator with 50%; Baraka Petroleum with 18.75%; Sonatrach with 25%; Baraka Mali Ventures Ltd with 6.25%.
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