Petsec Energy Raises Stake in Yemen's Block 7 to 29.75%
Petsec Energy announced Friday that it has executed an agreement with Mitsui E&P Middle East to acquire its 8.5 percent Participating Interest in the Block 7, Al Barqa Permit, in the Republic of Yemen. The Mitsui agreement follows the agreement executed with AWE Limited announced March 28, to acquire AWE’s Participating Interest of 21.25 percent in Block 7.
Block 7 is an onshore exploration permit covering an area of 1,235,527 acres (5,000 square kilometers) located approximately 211.2 miles (340 kilometers) east of Sana’a, the capital of Yemen. The block is operated by Australia’s Oil Search and contains the Al Meashar oil discovery as well as an inventory of leads and prospects defined by 2D and 3D seismic surveys, which hold significant oil potential.
The terms of the transaction include a cash consideration of $0.4 million, the replacement of Mitsui E&P Middle East’s existing Letter of Credit with the Arab Bank, and working capital adjustments on completion. Completion of the transaction is subject to customary approvals from the Joint Venture Partners, the Yemen government and the state owned Yemen Oil and Gas Company. Both the Mitsui and the AWE agreements will be presented together to the Yemen government for approval.
Petsec Energy’s Chairman, Terry Fern, commented on the Agreement:
"We are pleased to have entered into this agreement with Mitsui to acquire their 8.5 percent interest in Block 7, thereby increasing our interest to 29.75 percent.This enlarged interest will provide a meaningful exposure to high value oil assets within a region that is highly prospective for oil. Block 7 has the potential to add significant oil reserves to Petsec Energy’s resource base and significant value to the Company’s shareholders. We look forward to working with the operator, Oil Search, to further appraise the Al Meashar oil discovery and explore the remainder of the Block. Petsec hopes to build upon this initial investment in the Republic of Yemen by seeking further reserve development acquisitions in the region".
On completion of the transaction the interests in Block 7 (Al Barqa) will be:
- Petsec Energy Yemen: 29.75 percent
- Oil Search (ROY) ( Operator): 34.00 percent
- KUFPEC (Aden): 21.25 percent
- The Yemen General Corporation for Oil and Gas: 15.00 percent
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