Universal Power has been awarded a Petroleum Exploration License ("PEL") for the offshore Namibian blocks 2813A, 2814B, and 2914A by the Ministry of Mines and Energy ("MME") of the Republic of Namibia. Universal will have a 40% working interest in the blocks; HRT O&G Exploração e Produção de Petróleo Ltd. ("HRT O&G") will have a 40% working interest, and Acarus Investments (Proprietary) Ltd., will have a 20% participating interest. The designated operator of the blocks is HRT O&G.
"This award adds three strategically important blocks to our portfolio and is being done in partnership with HRT O&G, the world's premier experts along the offshore South Atlantic margins," said Mr. Gabriel Ollivier, President and CEO of Universal. "Given the extensive field work we have conducted in assessing the regional and lease-specific prospectivity of the Orange basin, securing blocks 2813A, 2814B, and 2914A is key to our regional land position, which now stands at over 42,000 square kilometers of contiguous acreage."
Mr. Duane Parnham, Universal's Chairman said, "These blocks add to our growing asset base with an agreement that enables us to partner with the company that predicted some of the world's largest pre-salt oil discoveries. HRT O&G's experience and expertise in techniques that maximize the probabilities of success materially adds to the likelihood that we will succeed in finding Namibia's large offshore oil pools. In addition to mitigating exploration risk, Universal's partnership with HRT O&G will significantly reduce our net risked capital exposure by sharing costs associated with the data acquisition and scientific work that will precede the drilling of any wells. HRT O&G also brings strategic relationships with many of the world's major oil and gas companies that could lead to further partnering opportunities."
About Blocks 2813A, 2814B, and 2914A
The blocks collectively span an area of 15,382 square kilometers (1,538,200 hectares, or 3,789,094 acres). The three blocks are contiguous, and are positioned immediately west and diagonally southwest of the large Kudu gas discovery, located in the southern portion of the Namibian offshore leases in what is geologically known as the Orange basin. In addition, the three blocks link to Universal's 90%-owned 2713A and 2713B blocks to the north, and 90%-owned 2815 to the east.
The PEL for blocks 2813A, 2814B, and 2914A has three phases, with the agreement effective May 14, 2010. Phase 1 spans four years, with work program commitments focused on assembly, interpretation, and mapping of existing 2D and 3D seismic data followed by new acquisition of seismic data. Additional techniques may also be employed that will add to detailed satellite oil slick detection, geotechnical, and geochemical field work that has already been done by or on behalf of Universal in the Orange basin. The estimated gross cost of the first four-year phase is US$8,500,000. Phases 2 and 3 are each renewable for a two year period, and carry a commitment to drill one well during each phase.
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