Sterling Energy Withdraws from Block C-3, Mauritania

Source: www.gulfoilandgas.com 1/29/2016, Location: Africa

Sterling Energy plc, the AIM listed upstream oil and gas company with interests in Africa, announces that its wholly owned subsidiary Sterling Energy Mauritania Limited (SEML) has submitted a notice of withdrawal to its joint venture partners in relation to Block C-3, offshore Mauritania. As part of the withdrawal, SEML will assign its entire 40.5% participating interest in the production sharing contract for Block C-3, located offshore in the Islamic Republic of Mauritania (the ‘PSC’) to Tullow Mauritania Limited (Tullow) at no cost to Tullow. The minimum work obligations for Block C-3 have been completed. As a result, SEML will have no additional costs associated with the withdrawal.

Completion of the withdrawal remains subject to the approval by the Government of the Islamic Republic of Mauritania. Upon completion of the assignment the holders of the PSC will be: Tullow (Operator) -90%; and Société Mauritanienne des Hydrocarbures et de Patrimoine Minier - 10%.

Block C-3

The PSC, awarded in 2013, covers Block C-3, offshore Mauritania, comprising an area of approximately 9,800km2. In 2014 the Operator acquired 1,600km of 2D seismic. Following receipt of the processed regional 2D seismic (comprising ca. 1,854 line kms), the Company is of the view that the 2D seismic data has not sufficiently de-risked the block potential, to justify SEML entering into Phase 2 of the PSC in June 2016. Phase 2 includes a minimum work obligation of 700km2 of 3D seismic and the drilling of 1 well.

Block C-3 provided SEML entry into an underexplored area of the Mauritanian shelfal region with a newly acquired regional infill 2D seismic grid. In addition, Block C-3 provided protection acreage adjacent to SEML’s other exploration interest in Block C-10, offshore Mauritania. The withdrawal from Block C-3 does not impact SEML’s interest or activity in Block C-10 and SEML look forward to working with Tullow to mature the existing portfolio and finalise the planned well on Block C-10 for 2017.

Eskil Jersing, the Company’s Chief Executive Officer commented:

“Our entry into the C-3 block was prefaced on the block providing dependent running room for the immature shelfal Cretaceous and Jurassic plays recognised in Block C-10. In our opinion the newly acquired and processed regional 2D seismic has not sufficiently de-risked Block C-3 to enable Sterling to commit to enter into Phase 2 of the PSC due to begin in June 2016. The withdrawal from Block C-3 is entirely in-line with our approach of disciplined exploration. We would like to thank Tullow for all its efforts as operator over the last year and SMHPM, the National Oil Company of Mauritania, for their support and look forward to continuing to work with them to de-risk and mature the remaining potential in Block C-10.”

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Related Articles: 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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