Aladdin Signs LOI for Percentage of Russian Licenses
Aladdin Oil & Gas Company ASA has entered into a letter of intent to acquire 80 percent of four Russian oil licenses in the Orenburg-area for US $17.5 million. One of the licenses is presently in production and produces approximately 250 barrels of oil per day. The total reserves, C1 and C2, are estimated to 25 million barrels.
"The licenses are located around Aladdin Oil & Gas` existing licenses in the mature Orenburg-area, which gives us a god opportunity to assess the geology and the reservoir conditions of the fields. The test reports are very promising. In addition, it's our experience that the new 3D seismic studies could reveal a significant potential in the licenses," Espen Glende comments, CEO of Aladdin Oil & Gas Company.
The licenses were drilled in the 1970s and 1980s - and range from two to 50 square kilometers. The reservoir depths range from 1500 to 3500 meters. Presently, one of the licenses produce's approximately 250 barrels per day, while the licenses' historical cumulative production is around four million barrels. The remaining reserves, C1 and C2, are estimated to 25 million barrels.
"The four new licenses will strengthen our position in the Orenburg region, diversify the risk further, and increase the present production. The reservoir horizons have already been identified as productive, and the reserve estimate can be increased further by the use of modern technology. A final agreement is expected to be entered into within three months," said Glende.
According to the letter of intent, Aladdin Oil & Gas Company will pay US $17.5 million for 80 percent of the four licenses, while the present owners will keep a share of 20 percent. The letter of intent is subject to a successful due diligence and satisfying financing.
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