African Petroleum Corporation has signed a non-binding term sheet agreeing terms with a private London-based independent oil and gas company to farm-in to the company’s 100% owned Liberian LB-08 licence.
African Petroleum did not reveal the name of the London-based player.
Pursuant to the term sheet the third party has agreed, subject inter alia to completion of due diligence and the entering into of mutually agreed contracts, to acquire a 50% net participating interest in the LB-08 licence in return for the payment of 50% of all future costs and expenditures relating to the LB-08 licence and a contribution to past costs and expenditures.
“The signing of the Term Sheet is a significant milestone for African Petroleum Corporation.”
The LB-08 licence is situated in a highly prospective region offshore Liberia. In an independent review of African Petroleum Corporation’s acreage conducted by ERC Equipoise Ltd in April 2014, the estimated net unrisked mean prospective oil resources of LB-08 exceeds two billion barrels. With an oil discovery in the adjacent licence and proof of a working hydrocarbon system in the central Liberian basin, the company says it believes that LB-08 has substantial potential.
The company says that the completion of the farm-in transaction as contemplated by the Term Sheet is subject to contract and a number of conditions precedent, which, apart from one pertaining to approval from the Liberian Government, must be satisfied or waived no later than January 29, 2015.
African Petroleum Corporation’s Chief Executive Officer, Dr Stuart Lake, commented: “The signing of the Term Sheet is a significant milestone for African Petroleum Corporation. Should the farm-in transaction complete, the incoming third party will bring a breadth of knowledge and experience to the partnership and will allow the Company to continue its exploration programme in its highly prospective acreage in Liberia benefiting from the falling operating costs brought on by a lower oil price. African Petroleum Corporation continues its negotiations with potential partners in its other licences and remains confident that it will secure additional farm-outs in due course.”
Also, African Petroleum recently entered into the First Renewal Period on licence Senegal Offshore Sud Profond (SOSP).