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Centurion Signs an Agreement for the Sale of its Tunisian Producing Properties

Source: 2/28/2005, Location: Africa

As part of its strategy to concentrate corporate activity on higher impact exploration and development, Centurion Energy International Inc. ("Centurion") is pleased to announce that it has entered into an agreement with Candax Energy Inc. ("Candax") for the sale of the Company's Tunisian producing properties for a purchase price of $41.2 million (Canadian funds) plus working capital adjustments effective January 1, 2005. The sale is anticipated to close by April 30, 2005, subject to certain conditions including successful purchaser financing and the receipt of various third party and government consents.

Centurion's ownership in the Mellita Permit in Tunisia and the accompanying PetroCanada farm-out are not included in the sale of the Tunisian assets. Additionally, Centurion retains the right to participate for up to 50% of Candax's resultant working interest in any Triassic exploration well drilled at either or both of the Ezzaouia and El Bibane concessions.

Candax has agreed to purchase Centurion's 100% owned subsidiaries that operate in Tunisia which own a 31.4% working interest in the Ezzaouia concession and the Ezzaouia oilfield; a 73.8% working interest in the El Bibane concession and the El Bibane oil field; an 80% working interest in the Robanna concession and the Robanna oil field and a 75% working interest in the Al Manzah concession and the Al Manzah oil field. Also included in the purchase is the 50% share ownership in the SEEB power plant.

Production from the fields being sold at the January 1, 2005 effective date totaled approximately 1,200 bopd and 4.4 mmscf/day of natural gas production (approximately 1,900 boepd).

The divestiture of mature producing properties in Tunisia is part of Centurion's strategy to concentrate its financial and manpower resources on higher impact plays. The Company has extensive exploration and development opportunities in Egypt in its Nile Delta natural gas and condensate blocks as well as other exploration prospects in the West Gharib block, onshore near the Red Sea, and the Ganope Block 2 in Upper Egypt. The company is continuing to pursue a new country entry in the African continent and as mentioned above has still retained participation in its potentially high impact plays in Tunisia; the Mellita Permit and the right to participate in the Triassic plays at Ezzaouia and El Bibane.


El Wastani - 4 Test Results

The El Wastani - 4 well located approximately 1.5 km northwest of El Wastani - 3 and one km north of El Wastani - 1 reached total depth on January 22, 2005. A service rig was then mobilized and the well tested 15 mmscf/day of natural gas and 411 boepd of condensate from a 19 meter perforated section in the lower Abu Madi sands. The well will be tied in shortly to the El Wastani field facilities, but production will be prorated with other El Wastani field wells as the available additional throughput capacity of the field facilities only allows for an increase from the current 42 mmscf/day to a new level of 45-50 mmscf/day.

El Wastani - 9 Spuds

The drilling rig used for the El Wastani - 4 well was moved to the El Wastani - 9 location and the well spudded on February 15, 2005 and is currently drilling ahead.

Abu Monkar - 2 Exploration Well

The Abu Monkar - 2 well is being drilled to a target in the Sidi Salem formation. The well reached the top of the targeted formation but has encountered mechanical problems resulting in the drill bit becoming stuck in the hole. The well was already cased to within 350 meters of the problem area and an operation is underway to side-track the well and continue drilling to its planned total depth in the Sidi Salem formation. It is expected that it will take approximately 2 weeks to reach total depth in the well. The Abu Monkar - 2 well is the first well drilled on the South El Manzala development lease to target deeper and potentially liquids rich natural gas.

3D seismic Program - West Manzala and West Qantara Exploration Blocks

Centurion has expanded its plans for 3D seismic acquisition on the two new Nile Delta concessions. The program has been expanded from 1,000 square kilometers to 2,000 square kilometers at an estimated cost of $US 20 million for the total program. The crews have started the program and the processing of the 3D seismic data will be done concurrently as the acquisition takes place. Depending on rig availability, the Company is planning to drill at least one well on a 3D seismically defined location in the new concessions during 2005.

Current Company Production Levels

Assuming the sale of the Tunisian producing properties closes as anticipated and because the sale has a January 1, 2005 effective date, the current level of production from Centurion's Egyptian properties is the total production level for the Company. Current production consists of 42 mmscf/day of natural gas plus 2,800 boepd of condensate and natural gas liquids from the El Wastani development lease; 59 mmscf/day of natural gas from the South El Manzala development lease and 590 bopd of oil from the Hana field. Total production is approximately 20,200 boepd without Tunisian production.

Centurion Energy International Inc. is a Calgary based oil and gas exploration and development company engaged in the exploration, development and production of oil and natural gas in Egypt and Tunisia.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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