Addax Petroleum Corporation has signed a Production Sharing Contract (PSC) with the Republic of Cameroon, relating to the Iroko exploration license area. Under the PSC, Addax Petroleum acquires a 100% interest in the Iroko license area and is the operator. The Societe Nationale des Hydrocarbures, the national oil company of Cameroon, holds a back-in right of 30% in case of a development.
Commenting, Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said: "I am delighted that Addax Petroleum has been awarded this promising exploration acreage by the Republic of Cameroon, situated in the prolific Rio del Rey Basin where the overwhelming majority of Cameroon's production is located. We are excited by our exploration potential offshore Cameroon which we believe can deliver near-term value for our shareholders and the country. We are presently drilling our first exploration wells on the Ngosso license area and later in 2008 we plan to drill on Iroko."
In consideration for its interest in Iroko, Addax Petroleum is obligated to pay a signature bonus of US$3 million and undertake within the first three years a minimum work program valued at US$17.5 million, which includes the acquisition of 3D seismic data and the drilling of one well.
The Iroko license area covers an area of 15.75 square kilometers (3,890 acres) and lies approximately 30 kilometers offshore Cameroon where the water depth is approximately 40 meters. Presently, there are no wells drilled on Iroko but there is oil production nearby from the Pecten (Shell)-operated Mokoko-Abana field complex.
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