First Africa Gets Okay for Development of Orovinyare Field Offshore Gabon
First Africa Oil's subsidiary Gulf of Guinea Petroleum Corporation Gabon (EOV) Limited has received approval from the Government of the Gabonese Republic for the field development plan for its East Orovinyare Oil Field offshore Gabon ("EOV Field").
The fast-track development plan calls for the first appraisal/development well to be drilled from early January 2006 with the arrival in the field of GlobalSantaFe's Adriatic IX jackup. The previously announced mid-December 2005 spud of EOV-4 has been delayed by three weeks due to extended operation of the drilling rig on its previous contract.
GGPC is the permit holder (100%) and operator of the EOV Field, which is located 13 kms offshore in 20m of water. Oil was discovered by the previous operator, Marathon, in the late 1990's. In addition to the discovered oil, the broader East Orovinyare Permit Area holds potential for incremental production from several exploration prospects currently under evaluation.
Following the January 2006 drilling and testing of the EOV-4 well, GGPC has further contracted for a 100-day drilling program with GlobalSantaFe for the Adriatic VI, which is currently estimated to arrive in the Field during the first week of April 2006. It is anticipated that three additional development wells will be drilled and completed as well as an exploration well to prove up the broader prospect. The development plan incorporates unmanned well head structures tied back to a Floating Production, Storage and Offloading vessel (FPSO). Production of the light crude (37.5 API) will be processed on the FPSO and is expected to commence in late 2006.
The Company will require additional funds to implement and complete the estimated $68 million field development program during 2006. The FirstAfrica board is considering a number of different financing alternatives, including (but not limited to) an equity fundraising, project/debt finance, and a partnership or farm-in arrangement with a third party.
Further, with regards to third-party negotiations announced on March 30, 2005, the Company wishes to advise that, at this time, there is no further update to the announcement made on October 7th.
Commenting on the Gabon government's approval of the Field Development Plan, FirstAfrica CEO Robert Kirchner said, "the Gabonese government typically requires a minimum of 30 days for review and approval of field development plans. For FirstAfrica to receive immediate approval of its plan for EOV is a testament to the technical quality of this fast-track project and our excellent working relationship with the various agencies of the Government of the Gabonese Republic."
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