Ophir Energy plc has entered into an agreement with WHL Energy, an Australian listed E&P company, to acquire a 75% operated interest in Blocks PEC-5B/1 and PEC-5B/2 located offshore to the south of the Seychelles Islands in the Indian Ocean.
In exchange for the acquired interest, Ophir will repay back costs to WHL of US$4mn and fund the acquisition of 1,500 km2 of 3D seismic data. If Ophir elects to retain its interest in the licences beyond mid-2015, it will pay further contributions towards the next exploration phase.
This agreement secures a substantial, operated footprint in an oil-prone frontier basin in which a number of leads have already been identified on the existing 2D seismic data. The majority of these leads are located in water depths of less than 75m which should reduce drilling costs. The Seychelles is a lightly explored province, although encouragingly, oil shows have been observed in wells drilled to the west of the acquired acreage.
The acquisition is conditional on the Government of Seychelles providing consent and approval of an amended and restated petroleum agreement under which the interest is held.
Nick Cooper, Ophir Energy CEO, said: “Ophir’s preferred exploration model is to secure large operated positions, with significant running room, in frontier basins where the fundamental elements of a hydrocarbon system are in evidence. We are therefore pleased to have executed this material new basin entry into the offshore East Africa area. Our initial analysis already highlights a portfolio of structural prospects and leads and we look forward to pursuing an active exploration programme in the area to test this thesis.”
WHL Energy Managing Director, David Rowbottam, said: “The Company is delighted to have secured a farm-in partner of Ophir Energy’s standing. Having a company with the record of Ophir Energy partner together with WHL Energy to take the ‘flagship’ Seychelles project forward is a tremendous milestone for the Company. Since acquiring the Seychelles interests in 2010 the Company has worked extremely diligently to put together an exploration package that would attract a suitably qualified international oil and gas company to join and further develop what the Company sees as a world class asset. Achieving this great result has been most pleasing given the difficult farm out market and current business climate.”
“In Ophir Energy, which has a strong global reputation for technical excellence and exploration success – particularly in East and West Africa – the Company believes it has found an ideal partner. The Company looks forward to working closely with Ophir to progress the Seychelles project to the benefit of WHL Energy’s shareholders and the people of the Republic of the Seychelles,” Rowbottam said.