Canadian Superior Energy Inc. announced what it calls its Oasis Project, referring to the Company's entry into North Africa. Oasis commenced with the formal signing ceremonies for the offshore "7th of November Block" Exploration and Production Sharing Agreement (EPSA) that were conducted Wednesday, August 27, 2008, in Tunis, Tunisia.
Canadian Superior and the Tunisian/Libyan company, Joint Exploration, Production, and Petroleum Services Company (Joint Oil) also signed a Swap Agreement awarding an overriding royalty interest and optional participating interest to Joint Oil, in Canadian Superior's Mariner Block, offshore, Nova Scotia, Canada. This represents the first such agreement for either Tunisia or Libya. Joint Oil is owned equally by the Tunisian government via Entreprise Tunisienne d'Activites Petrolieres (ETAP) and the Libyan government via Libya Oil Holdings.
Under terms of the EPSA, Canadian Superior has been named Operator for the "7th of November Block" which comprises an area of approximately 1200 square miles (750,000 acres), located some 75 miles offshore the Mediterranean Gulf of Gabes, in water depths ranging from 250-375 feet. Nearly equal portions of the block fall within the territorial waters of each of Libya and Tunisia.
Portions of the multi-prospect block lie along the productive trends of the very large El Bouri (Libya) and Ashtart (Tunisia) oil fields which are reported to have produced over 750 million barrels of oil and 250 million barrels of oil, respectively. The multi-TCF gas/condensate field, Miskar (Tunisia) is also located in an adjacent block. A number of highly prospective prospects have been identified on the "7th of November Block" by Joint Oil and Canadian Superior utilizing the large existing seismic database. These prospects represent a variety of geological plays and proved hydrocarbon systems.
The exploration work commitment for the first phase (4 years) of the 7 year Exploration Period will include three exploration wells, 300 square miles of 3D seismic, and one appraisal well. This appraisal well is intended to be the first well in a fast-track drilling program and will be a direct offset to two significant oil and gas discoveries drilled in the 1990s on a feature known as Zarat in the adjacent contract area. Based on 3D seismic acquired subsequent to the discoveries, a substantial portion of the undeveloped Zarat discovery area is interpreted to extend north, into the "7th of November Block." The primary proved oil, condensate, and gas reservoirs are anticipated at drilling depths around 9000 feet. Planning and rig contract discussions are already underway, targeting a two-well, back-to-back, drilling program likely commencing within the next 6 months. The initial exploration wildcat well will be drilled on a geologically-related seismic prospect (Fisal) located approximately 6 miles northeast of the Zarat appraisal well.
Commenting enroute from Tunis, upon having signed the Joint Venture, Canadian Superior's Chairman, Greg Noval stated, "Canadian Superior is very fortunate to have been presented the opportunity to negotiate for this very highly prospective block. This deal follows several years of hard work and represents an important milestone in our international high impact growth strategy. We are pleased to have concluded such a complex agreement involving assets located within three countries.
"An undisclosed number of companies expressed interest in negotiating for the block and after a highly competitive bidding process, eight companies were chosen to negotiate with Joint Oil, prior to the selection of Canadian Superior.
"We look forward to working with Joint Oil and the respective governments of Tunisia and Libya on this and future endeavors. In the short-term, Canadian Superior will capitalize on the fortunate position of commencing operations with an appraisal well on an already discovered oil accumulation. With our new partnership, large acreage position, and established relationships, I predict our entry into North Africa through the Oasis Project will result in development of a core oil and gas producing area for the Company."
Speaking in Tunis, Dr. Waniss Otman, General Manager of Joint Oil, added, "The new partnership with Canadian Superior is a monumental step for Joint Oil providing both exploration and production opportunity in the "7th of November Block" as well as our Company's first oil and gas participation outside either Tunisia or Libya. We look forward to moving ahead with Canadian Superior on this exciting project."
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