TG World Energy Provides Update on Tenere Concession
TG World Energy reports that, according to recent news reports, the Algerian national oil company, SONATRACH, has acquired the right to explore Niger's Kafra Block, the southern border of which forms part of the northern border of the Tenere Block. Management of TG World is of the opinion, based upon its knowledge of regional geology, that the Kafra Block contains a continuation of the Cretaceous-Tertiary rift basin system to the north of TG World's Tenere Block, abutting against the Niger-Algerian border. The Kafra Block is contiguous with the Algerian exploration block, Tafassasset, held by Sonatrach on the Algerian side of the border.
The Exploration Permit is reported to cover 23,737 square km, with a work commitment of 1,000 kms of 2D seismic (firm) in the first 4-year exploration period; 400 km seismic and two wells in a second exploration period; and 400 km and one well in a third exploration period. Minimum program expenditures are estimated in news reports at US$6 million (firm) for the first exploration period; US$15 million for the second period; and US$8.5 million for the third period, for a total of US$29.5 million. According to the news reports, the Sonatrach commitment, undertaken through its recently formed subsidiary, Sonatrach International Exploration and Development Corporation (Sipex), was signed in Niamey, capital of Niger, on June 9, 2005, by Sonatrach's President Mr. Mohamed Meziane. The signing ceremony is reported to have been attended by the Algerian Energy and Mines Minister Mr. Chakib Khelil and the Niger Mines and Energy Minister Mr. Mohamed Abdoulahi, as well as Niger Ministry officials and other Sonatrach representatives.
"The reports of Sonatrach's involvement in Niger are positive for TG World," said TG World's CEO, Cliff James. "We worked closely with Sonatrach for several years on various aspects of the Tenere Block. Prior to our involvement with the current Tenere Block Operator, CNPC International (Tenere) Ltd. ("CNPCIT"), a subsidiary of the China National Petroleum Corporation ("CNPC"), Sonatrach had committed to take 20% of the Tenere Block. A strong commitment to Niger on the part of Sonatrach would, in our view, add to the momentum of activity in the country generally, and to those forces keeping the door open for an eventual pipeline system to the Mediterranean through Algeria in particular."
TG World holds a 20% Carried Interest in the Tenere Permit, Niger, and the Operator, CNPCIT, holds an 80% interest. The minimum work program on the Tenere Block consists of 1,500 km seismic acquisition and three exploration wells. The minimum seismic acquisition obligation has been fulfilled. On June 18, 2005, CNPCIT completed the acquisition of 1,686.525 km of new 2D seismic. The seismic data, which is considered of high quality by both TG World and CNPCIT, is currently being processed in a processing facility constructed in Niamey by CNPCIT. TG World has independently processed some of the data in Calgary for purposes of comparison and control, and both companies will shortly be proceeding to interpretation of the data and preparation for further activity, subject to approval of the Tenere Operating Committee.
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