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Thursday, February 9, 2012
SacOil and Transnational Corp. have revised the terms for SacOil’s entry into Nigeria’s OPL 281. Under the revision SacOil and technical partner Energy Equity Resources (EER) have been given a reduction in farm-in fees from $32.5 million to $24.5 million.
Transcorp will remain the operator of OPL 281 and will pay 60% of the Capex costs to first production, as opposed to SacOil and EER carrying 100% of the Capex costs as previously agreed.
Sacoil said that Transcorp will also post the performance bond connected to the license to the Nigerian government. Initiated by Transcorp, the revised terms followed as a result of a change of control in Transcorp.
Following this revision, EER’s 50% portion of the fees are carried by SacOil as an interest bearing loan to EER that is repaid from EER's entitlement to production in OPL 281. SacOil paid $12.5 million towards the signature bonus February 2011 and the outstanding $12 million becomes due once the remaining conditions precedent to the farm-in agreement have been met. These include perfection of title and all the necessary Nigerian government and NNPC consents in relation to the license.
According to the partners, a work program budget of $15 million is estimated for phase one of the exploration of OPL 281 and involves the reprocessing of the existing 3D seismic data and the drilling of at least one well. A Competent Person's Report issued by reserves auditing firm, AGR-TRACS International, has attributed a gross un-risked contingent resource of approximately 100 million boe, with additional potential in two further prospects and deeper zones.
"We are pleased with the revised terms as we will no longer be required to provide Transcorp with a carry on CAPEX costs from the point of entry to first oil," said SacOil CEO Robin Vela.
"All costs are now carried proportionately to the equity owned by Transcorp, EER and SacOil. SacOil and EER will be actively involved in the operations through the Operations and Management Committees."
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