Burren Energy Farms Out Stake in Two Exploration Areas to SNPC
Burren has entered into a conditional agreement for SNPC, the state-owned national oil company of the Republic of Congo, to acquire an interest in or 'farm in' to the Kouilou production sharing agreement, which includes the M'Boundi field and the exploration rights to the Kouilou permit area.
Burren will farm out 10% of its current 35% interest (i.e. reducing Burren's residual interest to 31.5%) for a net consideration of US$35 million, payable 50% in cash and 50% via a rebate of profit oil accruing to SNPC under the terms of the PSA.
Maurel & Prom ('M&P'), the operator under the PSA is also farming out 10% of its interests on similar terms. Upon completion SNPC will have a 10% interest in the Kouilou PSA as a whole, with a 8.9% interest in the M'Boundi field.
Completion of the transaction, which is still awaiting signature by the Minister of Hydrocarbons, is conditional upon several matters, being primarily:
- The granting of a new development license for the M'Boundi field with a term of 20 years from the date of grant and an optional 5 year extension, in place of the current development license which expires in 2017 but may be extended for a further 5 years;
- The extension of the Kouakouala production license, which currently expires in January 2008, for a further 10 years; and
- Certain consequential amendments being made to the joint operating agreement relating to the Kouilou PSA.
Ratification by the Congolese parliament is required for certain of the
conditions precedent to be satisfied : completion is expected later this year.
In addition it is expected that parliamentary approval for the PSA governing the
La Noumbi permit area, which has been awaited for some time, will be procured,
allowing exploration activity to commence around the end of 2005 / beginning of
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