Simba Signs PSC for Blocks in Chad

Simba Energy Inc. has signed a Production Sharing Contract (PSC) with the Republic of Chad for 100 percent interests in three prospective oil & gas blocks within the Doba, Doseo and Erdis basins.

The PSC for all three blocks has a first exploration phase of five years and a second exploration phase of three years. The first exploration phase requires geological and geophysical studies to include processing and reinterpretation of existing 2D seismic, acquisition of at least 290 square miles (750 kilometers) of new 2D seismic, as well as 154 square miles (400 square kilometers) of 3D seismic (or 2D equivalent) to determine the range of possible drilling opportunities for the second phase that requires two exploration wells.

The first two blocks, Chari Sud Block I and the southern half (50 percent) of Chari Sud Block II are adjacent to each other and therefore treated as one (3,904 square miles or 10,111 square kilometers). These blocks lie just southeast of the Mangara and Badila oil fields where proven reserves are currently in advanced stages of appraisal and production development. Assessment of earlier gravity and magnetic surveys across both these blocks, along with existing 2D seismic, has confirmed these blocks comprise the same basin morphology as these producing fields. The NE-SW trending Borogrop fault zone crosses both blocks in a manner that divides Chari Sud Block I into both a north and south section while Chari Sud Block II is mainly south of this fault zone. This fault represents the basin axis which is the deepest part and has lateral movement that can enhance the formation of traps while could also be a conduit for migration of hydrocarbons.

The third concession, Erdis Block III, covering 6,062 square miles (15,700 square kilometers), is located in the southwestern portion of the Erdis basin, known as the Kufra basin in Libya, where there has been known discoveries. Currently, seismic acquisition is being carried out and two wells are now planned to the east on Sudan's Block 14. Recent gravity across Erdis Block III indicates the presence of a major depo center and ties it to a sediment source to the west where along with a deep mature section and this current activity in Sudan, support the Company's view of the block's prospectivity.

Hassan Hassan, Managing Director of Operations stated, "We view the exploration potential of these three blocks in Chad as very favorable. Once the National Assembly (of the Republic of Chad) ratifies the PSC we intend to initiate the first phase of exploration field work. Our technical team has begun a thorough assessment and re-processing of data available on Chari Sud I & II to initiate preparations and planning for our first phase of work in the southern concession."