Genel to Farm-in Sidi Moussa Exploration Permits

Source: www.gulfoilandgas.com 8/23/2012, Location: Africa

LONGREACH OIL AND GAS LIMITED, an independent oil and gas company holding exploration and near term development licences in Morocco, is pleased to announce that, subject to the consent of the Ministry of Energy and the Ministry of Finance in Morocco, Genel Energy plc (Genel) will join Longreach and its joint venture partners, Serica Sidi Moussa B.V. and San Leon Offshore Morocco B.V. (respectively Serica and San Leon), in the exploration of the set of permits which comprise the Sidi Moussa Offshore area (Sidi Moussa) in Morocco.

Under the transaction, Genel will acquire a 60% equity interest in Sidi Moussa, pro rata from each of Longreach, Serica and San Leon according to their respective equity interests. In return, Genel will pay US$1.3 million (US$130,000 net to Longreach) in recognition of past costs, and will pay for the drilling of the commitment well required under the terms of the First Extension Period of the Sidi Moussa permits (including the full costs relating to the ONHYM carried interest), up to a cap of US$50 million. As a result of the farm-out, Longreach will hold an ongoing interest of 1.5% in the Sidi Moussa permits with Serica and San Leon holding 5% and 8.5% respectively. The joint venture partners have already informed the Moroccan authorities of their intention to proceed into the First Extension Period.

Over the past 2½ years, Longreach and its joint venture partners have carried out extensive geological and geophysical analyses of the sub surface in Sidi Moussa. Having identified several prospective exploration targets, a farm-out process was initiated to attract a partner with the requisite financial and technical capability to drill in the relatively deep waters of Sidi Moussa. The transaction with Genel is the successful result of that process.

Commenting, Bryan Benitz, Chairman and CEO of Longreach, said:

"Longreach and its joint venture partners are delighted to welcome Genel Energy into the Sidi Moussa Permits, offshore Morocco. The work undertaken on the Permits has shown considerable opportunities and bringing in a company such as Genel will enable the partners to conduct near term exploration drilling on this licence."


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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 

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