Beach, a wholly owned subsidiary of Beach Energy, announced the execution of a Production Sharing Agreement (PSA) for a 100% interest in the Lake Tanganyika South concession with the Government of the United Republic of Tanzania, in Dodoma.
The agreement gives Beach the right to explore the Great Rift Valley in western Tanzania.
The concession is considered highly prospective for oil, and Beach's exploration program will target plays analogous to those which are yielding significant success in the Rift system in Uganda.
The specific terms of the PSA are confidential. However, due to specific requirements related to operating in this western, more remote region of Tanzania, they are more favorable than the standard terms published on the Tanzania Petroleum Development Corporation (TPDC).
Tanzanian PSAs are structured into three exploration phases (4+4+3 years) totaling 11 years. Beach will conduct geophysical surveys and geological studies in the first phase to determine the range of drilling opportunities available. This information will help in designing the subsequent seismic surveys which are required to detail prospects prior to the selection of drilling candidates. Beach has a well commitment in each of the second and third exploration phases but has the option, at the end of each phase, to relinquish all of the remaining acreage without further obligation.
Prior to the execution of the PSA, Beach undertook planning work in respect of the upcoming geophysical surveys and depending on weather, hopes to complete aerial gradiometric gravity and magnetic surveys over the concession during the 2010 calendar year.
Beach Energy Managing Director, Reg Nelson said, "The signing of the Lake Tanganyika PSA is a major milestone for Beach. This is the first PSA signed by the Government of the United Republic of Tanzania over this part of the Rift valley. Given the success of Tullow Oil and Heritage Oil plc in nearby Uganda, along the same rift valley setting, where over 800 MMbbl has been discovered in the past seven years, Beach has high hopes for success in this emerging 'big oil' province."
Mr. Nelson also said "Beach is very grateful for the leadership, co-operation and professionalism displayed by TPDC in the negotiation of the PSA and looks forward to working with TPDC to explore this highly prospective acreage."
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