EnerGulf Signs MOU on Oil Block in Democratic Republic of Congo

EnerGulf Resources says it has entered into a Memorandum of Understanding (MOU) with the Democratic Republic of Congo (DRC), being represented by its Minister of Energy, to further negotiate the final terms of a Hydrocarbon Exploration and Production Concession covering all or significant parts of the onshore area, Les Zones du Bassin Cotier (ZBC). The ZBC is located in the onshore coastal Congo Salt Basin of Western DRC. The approximate size of the area is 4,916 square kilometers (1.2 million acres).

The ZBC is adjacent to the highly prospective Cabinda area of Angola. The offshore blocks of Cabinda closest to the ZBC contain the giant (greater than 500 million barrels recoverable reserves) Malongo and Takula field complexes operated by Chevron. Immediately adjacent to the ZBC in onshore Cabinda are several undeveloped shallow oil discoveries in blocks held by Devon, Occidental and ROC. It is also immediately adjacent to the East-Mibale, Laiwenda-Kinkasi and Muana-Banana fields operated by Perenco.

Onshore oil production from the Perenco fields is about 9,000 barrels of oil per day. Offshore production from Perenco and Chevron in DRC waters account for about 18,000 barrels of oil per day. Currently, proven and probable reserves for both onshore and offshore DRC is estimated at 107 million barrels of oil and 133 billion cubic feet of gas.

A major U.S. oil company previously documented six untested leads with potential recoverable reserves of 880 million barrels of oil within the ZBC. The primary potential reservoir zones associated with these leads are at depths between 6,000 and 10,000 feet.

Commenting on the MOU with the DRC, Jeff Greenblum, Chairman of the Board of EnerGulf stated, "We are planning a very aggressive exploration program that will begin upon the execution of the Concession that is being formalized. This agreement achieves another milestone in EnerGulf's Pan-African business plan of assembling a strong portfolio of high-impact oil and gas exploration opportunities."

Dr. Bill St. John, EnerGulf's Senior Advisor for African Exploration commenting on the geological merits of the MOU said, "Nearby onshore production has shown the area covered by our MOU has similar potential to the proven fields offshore. I believe that modern exploration techniques will unveil the world class potential long thought to exist in the Congo Salt Basin."