Dominion announced that it has agreed to farm-out a 20% working interest in Block 7, deepwater Tanzania to a subsidiary of Mubadala Oil & Gas (“Mubadala”). Following the completion of the transaction Dominion will hold an 80% working interest and operatorship in the Block. Under the terms of the agreement Mubadala will pay Dominion a $20 million cash consideration on closing and carry Dominion’s remaining 80% working interest in a new seismic programme expected to commence prior to year-end up to a cap of US$2,400,000.
As previously disclosed, a large 3D seismic survey was acquired on Block 7 at the end of 2010 over a lead identified as the Alpha structure. Dominion and Mubadala will now work together to assess potential targets, both within Alpha and on other prospects mapped within the survey area. A more detailed review of Block 7 operations was recently provided in Dominion’s Interim Results for the six months ended 30 June 2011.
Completion of the transaction will follow establishment of Mubadala’s subsidiary and is then subject only to Tanzanian Government approval.
Andrew Cochran, CEO of Dominion, commented:
“We are very pleased to have Mubadala as a partner in Tanzania and look forward to building a strategic relationship with them throughout the region. This agreement demonstrates the value of Dominion’s offshore portfolio, which will benefit significantly from Mubadala’s technical expertise, financial resources and gas marketing experience. The planned partnership may seek to bring in another party as we approach Block 7’s drilling phase next year, while Dominion accelerates work on the new acreage in Kenya.”
Maurizio La Noce, CEO, Mubadala Oil & Gas, commented:
“This opportunity represents an important step in the continued growth of Mubadala’s international oil and gas portfolio and our entry into an important, new high-impact exploration province. We look forward to working with Dominion, with its knowledge and experience of the region, on this exciting new venture and, potentially, others in the future.”
Mubadala Oil & Gas is a business unit of Mubadala Development Company with exploration and production interests in the Middle East, North Africa, and Central and Southeast Asia. Current net working interest production is in excess of 400,000 barrels of oil equivalent per day (boepd).
Source:Dominion Petroleum , October 7, 2011