Page 10 - AfrOil Week 45 2019

AfrOil
NEWS IN BRIEF
AfrOil
SERVICES
Anglo-African Oil & Gas
signs rig option agreement
for Tilapia 103C-ST in
Republic of Congo
Anglo African Oil & Gas (AAOG), an independ- ent oil and gas developer, is pleased to announce that it has entered into a rig option agreement with Société de Forage Pétroliers (SFP) for the provision of a rig to carry out drilling operations on well TLP-103C-ST at the Tilapia field, in which the company has a 56% interest.
The rig agreement gives AAOG the right to contract the rig for TLP-103C-ST and a further four wells at our call.
The SFP #1 rig is the subject of contractual commitments to a super-major which will expire on December 30, 2019. SFP may extend such contractual commitments until (but not beyond) March 30, 2020, and will notify AAOG on or before November 30, 2019, as to whether its contractual commitments have been extended.
Drilling operations at TLP-103C-ST could therefore commence either in Q1-2020 or Q2-2020, depending on the Rig’s current com- mitments. AAOG will update the market once there is more certainty on timing.
The operational plan is to re-enter the exist- ing TLP-103C well and drill the new sidetrack just below the Mengo formation to test the Upper Djeno and explore the Middle Djeno for- mations. The objective is to determine whether the Djeno can be brought into production from either horizon.
Drilling activity is never without risk. How- ever, the directors believe that the sidetrack operations have an attractive risk/reward pro- file. TLP-103C has already proven the geological model and confirmed the presence of the Djeno at Tilapia. The fallback plan is to produce TLP- 103C from the Mengo formation.
James Berwick, the company’s CEO, said: “We are very pleased to have entered into the rig agreement and look forward to commencing operations at TLP-103C-ST as soon as the rig becomes available. The rig is the most suitable rig available in country and will come to TLP- 103C-ST directly from drilling operations for a super-major.
The board of AAOG appreciate that drilling operations will commence later than we had hoped but, following the problems encountered in drilling TLP-103C, it was important that we found the right rig for this drilling campaign to avoid any similar issues.”
Anglo-African Oil & Gas, November 12 2019
INVESTMENT
Sound Energy issues
marketing process update
on Morocco portfolio
Sound Energy, the Moroccan focused upstream gas company, is pleased to update investors on the ongoing marketing process with respect to its Eastern Morocco Portfolio.
The company announced on May 22, 2019, that, following a decision by its board to explore monetisation options for the company’s inter- ests in the Tendrara production concession, the Greater Tendrara petroleum agreement and the Anoual permits (which together constitute the Eastern Morocco Portfolio) with a view to assessing a sale of the portfolio prior to a final investment decision, the company had com- menced the marketing of the Eastern Morocco Portfolio.
The company has since entered into non-dis- closure agreements with 23 companies and, following these, hosted some 15 management presentations which resulted in the company receiving a number of non-binding offers for its Eastern Morocco Portfolio, delivering a range of valuations and risk/reward profiles.
Fundamentally, the company continues to believe the Tendrara basin requires further exploration drilling to unlock fully the basin potential and to deliver enhanced value to shareholders.
As a result, the company has now entered into a non-binding heads of terms (HOT) agreement with a privately-owned, UK registered com- pany specialising in energy asset development
and investment, which will, on completion of the transaction, result in the sale of a substan- tial proportion of the company’s interest in the Eastern Morocco Portfolio, whilst at the same time allowing it to retain a carried interest that provides the opportunity for Sound Energy and its shareholders to continue to benefit from sig- nificant potential upside in the Eastern Morocco Portfolio.
Under the terms of the HOT, Sound Energy has granted to the purchaser an exclusivity period expiring on February 14, 2020, subject to certain milestones being met, to complete due diligence on the Eastern Morocco Portfolio and to finalise a binding sale and purchase agree- ment for the proposed sale by Sound Energy of 51% (24.2% out of a total of 47.5%) of its share in the Eastern Morocco Portfolio for a total con- sideration of US$112.8mn. This sum consisted of a US$54.3mn cash consideration payable in tranches and an estimated US$58.5mn carry with respect to Sound Energy’s future capital expenditure requirements relating to its retained interest in the Tendrara production concession in order to achieve first gas production from the concession.
On completion of the proposed transaction, it is anticipated that Sound Energy retains a 23.3% share of the Eastern Morocco Portfolio syntheti- cally through a new joint venture. The company will also provide the purchaser with a one-year option to acquire a further 9% of Sound Ener- gy’s remaining interest in the Eastern Morocco Portfolio on the same proportional financial consideration and carry terms as the proposed transaction. Should this option be exercised, the company’s retained synthetic interest in the Eastern Morocco Portfolio would be reduced to 14.3%.
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Week 45 13•November•2019