Addax Nabs Additional Interest in JDZ Block 4
Addax Petroleum Corporation was awarded an additional 7.2% participating interest in Block 4 of the Nigeria/Sao Tome and Principe Joint Development Zone (“JDZ”) by an independent arbitration tribunal. The award increases Addax Petroleum’s interest in the license area from 38.3% to 45.5%. Addax Petroleum is also the Operator of Block 4.
Jean Claude Gandur, President and CEO of Addax Petroleum, said, "This award further enhances our leading position in this world class exploration region. I am very excited about the prospective oil resources of Addax Petroleum’s entire deepwater portfolio and I am looking forward to launching our high impact drilling campaign. Due to our interests across four JDZ license areas, a focused drilling strategy will be undertaken to include a consecutive exploration campaign of up to 10 wells across the region to demonstrate the full potential of these assets. I believe these exploration assets will be an important contributor to the growth of the company and will deliver value to our shareholders."
In 2007, Addax Petroleum and ERHC Energy Inc. (“ERHC”) entered into arbitration proceedings in respect of a 9% participating interest in JDZ Block 4 that had been committed to a third party. When that party failed to fulfil its obligations, the 9% reverted to Addax Petroleum and ERHC. Under the arbitration proceedings, Addax Petroleum claimed entitlement to 7.2% of the 9% interest, subject to the carried costs associated with the balance, being the 1.8% to which ERHC was entitled.
A panel of the London Court of International Arbitration confirmed that Addax Petroleum is entitled to the 7.2% additional interest for no additional monetary consideration beyond the $18 million previously paid by Addax Petroleum to ERHC. Addax Petroleum will continue to carry the costs associated with ERHC’s 19.5% interest in JDZ Block 4.
Addax Petroleum has contracted to commence drilling operations in JDZ Block 4 in the fourth quarter of 2008, but believes that the drilling rig will not be delivered until the second half of 2009. In the interim, the Corporation continues to seek a rig of opportunity to drill the 458 MMbbl Kina prospect in JDZ Block 4 as early as the fourth quarter of 2008.
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