MENA, Kulczyk to Jointly Explore Syria
MENA Hydrocarbons has agreed to participate with Kulczyk Oil in the exploration of Syria Block 9.
Under the terms of an agreement with Loon Latakia Limited ("Loon Latakia"), a wholly-owned subsidiary of Kulczyk Oil, MENA will:
- acquire a 30% interest in Block 9 by repaying to Kulczyk Oil 30% of approximately $10.4 million in costs incurred to date;
- fund 60% of the costs for the drilling of the first exploration well on Block 9; and
- assume liability for 30% of the $6,758,241 bank guarantee currently backed solely by Kulczyk Oil.
Tim Elliott, Chief Executive Officer of Kulczyk Oil, commented, "We are very pleased that a management and technical team with extensive experience in the region has recognized the potential of Syria Block 9 and agreed to move forward in partnership with us."
MENA is a private international company focused on building a resource portfolio in the Middle East and North Africa. MENA has a proven management and technical team with substantial experience in the Middle East. It currently operates a development concession in Egypt.
The Contract for the Exploration, Development and Production of Petroleum ("PSC") which gave Loon Latakia the right to explore for and produce oil and gas from Block 9, a 10,032 square kilometer area in northwestern Syria, became effective November 29, 2007. Under the terms of the PSC, Kulczyk Oil reprocessed and interpreted approximately 1,800 kilometers of previously existing 2D seismic data. The interpretation indicated a number of potential drilling targets in the southeast corner of Block 9 and the Company also acquired 420 square kilometers of new 3D seismic data in that area, commencing field operations in February and completed data acquisition in May, 2010. The processing and interpretation of this new 3D data is expected to be completed in the fourth quarter of 2010. The location and target depth for the first exploration well will be defined and the estimated costs to drill the well will be determined after evaluation of the recently acquired 3D seismic data and the first exploration well on Block 9 is expected to be drilled in the first half of 2011.
Kulczyk Oil has previously agreed to transfer a 20% beneficial interest in Block 9 to Triton Petroleum Pty Ltd and a 5% beneficial interest to an unrelated party. Accordingly, the direct interest of Loon Latakia in Block 9 is 75% before giving effect to the MENA agreement and 45% after giving effect to the MENA agreement. Any assignment of interest to either Triton Petroleum or MENA is subject to the approval of General Petroleum Corporation ("GPC"), the national oil company of the Syrian Arab Republic.