Oil company Hyperdynamics is moving forward with its plans to drill the Fatala well off Guinea with expectations to spud the well by the end of May.
A tri-party protocol with the country’s government and South Atlantic Petroleum (SAPETRO) was executed on Friday, March 10, the oil company informed on Monday.
The document was signed in Conakry by the Director General of the National Petroleum Office, Diakara Koulibaly, Dale Rollins, Managing Director of SAPETRO, and Ray Leonard, Hyperdynamics’ President and CEO.
Leonard, said: “I am delighted that all parties involved have agreed to move forward with drilling the Fatala well for the benefit of the Republic of Guinea and all other stakeholders.
“I am also thankful for the government of Guinea’s continued confidence in Hyperdynamics, and all parties involved look forward to the opportunity to drill the Fatala well. The commitment by SAPETRO to the Guinea project represents a big step forward in sharing project-related costs and risks with a reputable industry player.”
The objective of the protocol is to drill the Fatala well in the most effective way and if a discovery is made, to proceed with drilling an optimal number of follow-up exploration wells. According to the terms of the protocol, the drilling of the Fatala well must begin no later than May 30, 2017.
SAPETRO and Hyperdynamic’s wholly-owned subsidiary, SCS, will negotiate and finalize all transaction documents for SAPETRO’s entry into the project in conformity with the Production Sharing Contract (PSC) and submit for the approval of the government of Guinea no later than April 10, 2017.
To remind, SAPETRO signed a letter of intent in December to take a 20 percent participating interest in exchange for paying 40 percent of the Fatala well costs. If the total well costs go over $50 million, SAPETRO will pay its proportional 20 percent share for the amount above that figure.
Hyperdynamics added on Monday that the protocol also entails SAPETRO providing a $5 million security instrument as required under the PSC, upon the completion of transaction documents and receipt of the requisite approvals by the government of Guinea.
Also, the government of Guinea will enable SCS and SAPETRO to enter into the transaction documents and obtain all necessary government approvals and mobilize the requisite resources in the form of contracts, funds, and personnel to spud and accomplish drilling operations in respect of the Fatala well and subsequent exploration wells.
All three parties have agreed that all targets from the protocol should be achieved no later than April 10, 2017.
Hyperdynamics has already agreed on a drillship for its Guinea drilling campaign. The oil firm initially opted for the Pacific Bora but later accepted a proposal from its drilling contractor, Pacific Drilling, to deploy the Pacific Scirocco drillship instead.
Hyperdynamics holds a 100 percent working interest operatorship of the Guinea offshore license until SAPETRO completes its entry into the license with a 20 percent share.