Artumas has announced that the farm-out of its Mnazi Bay Production Sharing Agreement (PSA), its Area 1 Offshore Rovuma Block and its Onshore Rovuma Block as referenced in its press releases of July 22, 2009 and August 18, 2009 have been executed. Artumas will now seek host government and partner approval of the transfers contemplated by the documents. The commercial terms between the parties include:
Mnazi Bay, Tanzania
Les Etablissements Maurel & Prom SA (M&P) will farm-in to a 38.22% participating interest in all Petroleum Operations save for Exploration Operations where M&P will take up a 47.775% participating interest, the difference being due to Tanzanian Petroleum Development Corporation's (TPDC) 20% participating interest in all but Exploration Operations. Cove Energy plc (Cove) will farm-in to a 16.38% and 20.475% respectively in Petroleum Operations and Exploration Operations. Artumas' participating interests will thus become 25.4% and 31.75% respectively in Petroleum Operations and Exploration Operations. Artumas' share of costs for a 200 sq. km. 3D seismic program and an exploration well will be carried by M&P and Cove. In the event that a 3D seismic program does not take place, M&P and Cove will carry Artumas for an alternative exploration or appraisal program of equal cost to the seismic program.
Offshore Area 1 Rovuma Block, Mozambique
Cove will acquire Artumas' entire 8.5% participating interest in the Block and will accordingly assume all costs associated with Artumas' participating interests from the effective date of July 1, 2009. Artumas will in consideration receive a royalty amounting to 6.4% of Cove's profit petroleum accruing to the 8.5% participating interest. Should Cove pay further cash calls prior to completion of the transaction, Artumas' royalty will reduce by 0.5% per $1m of expenditure subject to a floor of 4% of Cove's profit petroleum.
Onshore Rovuma Block, Mozambique
M&P and Cove will respectively farm-in to a 24% and 10% participating interest in the Block. Artumas' participating interest will thus become 15.3%. Artumas' share of costs for the one exploration well that is an obligation well under the Exploration and Production Concession Contract will be carried by M&P and Cove. Should M&P and Cove pay further cash calls prior to completion of the transaction, Artumas' participating interest will reduce by 1% per $1m of expenditure subject to a floor of a 10% participating interest.
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