Press Release Source: Addax Petroleum
Addax Petroleum acquires equity position in highly prospective exploration Block
Thursday March 16, 8:28 am ET
/NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA OR JAPAN/
CALGARY, March 16 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum") announces that it has together with its co-venturers signed a Production Sharing Contract ("PSC") with the Nigeria/Sao Tome Joint Development Authority ("JDA") relating to Block 2 of the Nigeria/Sao Tome Joint Development Zone ("JDZ") and that it is now entitled to a 14.33 per cent participation interest in Block 2 of the Nigeria/Sao Tome Joint Development Zone ("JDZ") pursuant to a participation agreement with ERHC Energy Incorporated ("ERHC") entered into on 2nd March 2006. Addax Petroleum also signed a joint operating agreement among the Block 2 co-venturers where Sinopec is the designated Operator.
Block 2 - Addax Petroleum: 14.33 per cent
Addax Petroleum's Block 2 entitlement is pursuant to:
- Block 2 PSC signed today with the JDA under which Addax Petroleum is obligated to pay a signature bonus of US$8.28 million and its share of a minimum committed work program of one (1) exploration well or a minimum expenditure of US$28 million, and
- a Participation Agreement with ERHC entered into on 2nd March 2005 under which Addax Petroleum became entitled to a 14.33 per cent participating interest for an obligation to pay US$6.8 million and a commitment to carry the costs associated with an ERHC interest of 7.33 per cent in Block 2.
The JDZ is located approximately 180 kilometres offshore Nigeria and is adjacent to areas where several large petroleum discoveries have been made. The JDZ was established in 2001 following the ratification of a formal bilateral treaty between Nigeria and the island nation of Sao Tome and Principe. The JDZ is administered by the JDA.
Block 2 covers a gross area of 692 square kilometres (170,993 acres). The water depth in Block 2 ranges from approximately 1,300 to 1,900 meters. Seismic data acquired over Block 2 is presently being analyzed to delineate potential drilling locations.
In commenting on the signing of the PSC Jean Claude Gandur, Chief Executive Officer of Addax Petroleum said, "With the completion of the acquisition of a equity position in a third JDZ Block, Addax Petroleum has achieved its goal of establishing a significant position in this highly prospective exploration area. We believe these acquisitions offer exciting opportunities to the Company and its shareholders".