Black Marlin Energy (BMEL) announced the execution of a farm-in agreement between BMEL's subsidiary East African Exploration Limited ("EAX") and Africa Oil Corporation for EAX's entry into the Production Sharing Contracts in both the Federal Democratic Republic of Ethiopia and the Republic of Kenya.
In Ethiopia, Africa Oil will transfer a 30 percent license interest to EAX in the Blocks 2/6 and 7/8 Petroleum Production Sharing Agreements located in the highly underexplored Ogaden Basin of southern Ethiopia. In Kenya, Africa Oil will transfer a 20 percent license interest to EAX in the prospective Block 10A Production Sharing Contract, located in the Anza Basin of northern Kenya.
In both areas, Africa Oil has executed a seismic contract with BMEL's Upstream Petroleum Services Limited (UPSL), geoscience services unit, to undertake the seismic and acquisition using UPSL Sercel 428 equipped seismic crew and new 65,000lb vibrators to carry out a total of 1250 kms of 2D seismic data acquisition as part of the farm-in agreement. In each case EAX will pay for a disproportionate amount of the seismic costs until an agreed cap is reached, as well as paying Africa Oil for a proportion of its back and future operational costs.
This farm-in transaction is subject to approvals of the appropriate regulatory authorities from the Government of the Federal Democratic Republic of Ethiopia and Republic of Kenya in addition to waiver of pre-emptive rights by an existing partner in the Ethiopian licenses.
Jeff Hume, CEO of Black Marlin Energy, commented, "I am very pleased to be able to announce this strategic and exciting transaction and look forward to working very closely with our new partners, Africa Oil and New Age. All of the partners bring strong technical experience to the Joint Venture and we are very gratified that Black Marlin's business model of offering high quality seismic services as part of a farm-in package, has again been vindicated. Ethiopia is a new venture for both EAX and UPSL and we are very excited about the prospects.
"Having converted the UPSL 428 seismic crew to vibrator operations we now have a 12-15 month backlog of around 3000 kms of 2D seismic data for the crew to acquire in Ethiopia and Kenya, between our farm-in commitment with Africa Oil and our own work in Block 1 in Kenya."
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