Gulfsands has reached an agreement to acquire working interest positions in two exploration permits in Tunisia (Chorbane and Kerkouane Permits) and one exploration permit in Southern Italy (G.R15.PU) from AuDAX Resources Ltd. The agreement remains subject to the completion of formal farm-in documentation and board approvals from both companies.
Chorbane Permit -- Onshore Tunisia
The Chorbane permit is located onshore central Tunisia near the port city of Sfax and covers an area of 2,428 square km. The terms of the exploration and production within the Chorbane Permit are governed by a Production Sharing Contract ("PSC") with the Enterprise Tunisienne D'Activities Petrolieres or "ETAP". The permit is surrounded by several producing oil fields and extensive oil & gas infrastructure. The forward work commitment for the Chorbane permit requires the drilling of one exploration well and Gulfsands will pay 80% of the cost of the first exploration well in order to earn a 40% interest in the permit.
A number of prospects and leads have been indentified within the permit, the most prospective being a large tilted horst block ("Sidi Daher") that contains multiple potential targets and recoverable un-risked prospective resources of 80 mmboe (AuDAX estimate).
AuDAX has identified a seismic amplitude feature of particular interest that may indicate the presence of gas within one of the primary reservoir targets. The resource estimate associated directly with the seismic amplitude feature is 175 Bcf of gas or 29 mmboe (Audax probabilistic mean case).
Gulfsands expects to drill the Sidi Daher exploration well prior to the end of 2010, and the gross well cost is estimated at approximately $5.0 million. In the success case, appraisal and development activities will commence as quickly as practicable with first production expected within 18-24 months of discovery.
Kerkouane Permit -- Offshore Tunisia
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