Addax has signed an agreement with a subsidiary of Transocean for the provision and operation of the Deepwater Pathfinder drillship to commence its deepwater exploration drilling campaign. Addax Petroleum expects to receive delivery of the Deepwater Pathfinder at the end of the third quarter 2009 and intends, subject to Joint Development Authority approval, to commence the drilling of the Kina prospect in Block 4, located in the Nigeria/Sao Tome and Principe Joint Development Zone, shortly thereafter.
Commenting, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said, "We are extremely pleased to have resourced one of the premium drilling rigs available on the market today for our deepwater exploration campaign. The Deepwater Pathfinder has proven that it is exceptionally capable and has drilled efficiently for other operators in the deepwater Gulf of Guinea. Commencing Addax Petroleum's deepwater exploration campaign will be a very exciting time for our organization and shareholders
The Deepwater Pathfinder is a fifth generation dynamically positioned deepwater drilling rig capable of drilling in water depths up to 3,048 meters. The contract with Transocean requires the Deepwater Pathfinder to drill four wells in total with a minimum commitment of 120 days. The Transocean contract anticipates that the Deepwater Pathfinder will start drilling operations in the fourth quarter of 2009 once it has completed a drilling campaign for a third party operator in Nigeria. Payments under the contract are based on a day rate charging structure and a day rate of $600,000 to be allocated pro rata to Addax Petroleum and its applicable co-contractor parties.
Addax Petroleum has a deepwater exploration portfolio that consists of interests in five license areas comprised of OPL291, offshore Nigeria, and Blocks 1, 2, 3 and 4 in the Joint Development Zone ("JDZ") between Nigeria and the Republic of Sao Tome and Principe. Addax Petroleum operates JDZ Block 4 and OPL291 while Chevron, Sinopec and Anadarko operate JDZ Blocks 1, 2 and 3, respectively. As at December 31, 2008, Netherland, Sewell & Associates Inc., independent oil and natural gas reservoir engineers ("NSAI"), estimates the Corporation's working interest best estimate unrisked prospective oil resources for its deepwater portfolio to be 1,359 MMbbl (493 MMbbl risked).
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