VAALCO has executed a farm-out agreement with Total Gabon for the Mutamba Iroru Permit, onshore Gabon, which is 100 percent owned by VAALCO. Under the terms of the agreement, VAALCO and Total have committed to reprocess 400 kilometers of 2-D seismic data and drill one exploration well, superseding VAALCO's prior obligation to acquire 200 kilometers of 2-D data on the Permit. In return for Total funding an agreed portion of the new work program, Total will receive a 50% interest in the Permit.
The agreement is subject to obtaining the approval of the Republic of Gabon for the amended work program, including a one year extension to allow sufficient time to conclude the seismic study and drilling operations. Government approval is expected within 30 days.
Mr. Robert Gerry, Chairman and Chief Executive Officer of VAALCO stated, "We are pleased to welcome Total as a partner and, given their expertise in Gabon, we look forward to working with them to high-grade potential prospects on the Permit."
Under the terms of the agreement, VAALCO will remain as operator of the Mutamba Iroru Permit through the drilling of the exploration well. In the event that exploration results lead to a development plan, Total has the option to assume the operatorship of the Mutamba Iroru Permit. Total currently has production infrastructure in place as operator of the Atora field to the north of the Mutamba Iroru Permit.
VAALCO operates the Mutamba Iroru Permit through its wholly owned subsidiary VAALCO Gabon (Production), Inc. VAALCO also is the operator of the Etame Permit offshore Gabon where it currently has net production of approximately 5,000 barrels oil per day.
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