Tuesday, January 22, 2008

Egyptian Driller Buys 10% Of Block 4

Egypt's sixth-largest natural gas producer, which is currently producing 32,000bpd of crude, announced this morning that it has acquired 10% of Block 4 from the troubled Hercules/Centurion joint venture that lacked the money to reap the oil riches believed to await explorers in the most sought-after property in the Nigeria-Sao Tome & Principe Joint Development Zone.

The development puts drilling plans on a more secure footing, and promises an improvement in share price for companies that own an interest in the block.

ERHC Energy currently owns 26.7% of Block 4.

Here is the press release from Egypt's Dana Gas:

Dana Gas share ownership in West Africa officially approved

Dana Gas, the first and largest regional private-sector natural gas company in the Middle East, with activities in the Middle East, North Africa and South Asia (MENASA) region, announced that it now officially owns a share in one of the blocks of an oil and gas rich offshore province in West Africa's Gulf of Guinea, one of the richest hydrocarbon sources in the world.

The Nigeria-São Tomé and Príncipe Joint Development Authority (JDA) have formally approved the change in share ownership of Hercules/Centurion interest in the Joint Development Zone (JDZ) Block 4, to Dana Gas. Based upon this approval, Dana Gas currently holds 10% participating interest in Block 4.

The JDZ is an emerging hydrocarbon province with world class prospects and moderate risk, located in the vicinity of several of the deep water Nigeria giant oilfields. Block 4 covers an area of 212,000 acres (857 km²) and is situated 10 km southwest of the recently announced OBO-1 discovery. Block 4 is operated by Addax, which is actively pursuing various drill ship options to secure a slot to spud the first of three commitment wells prior to the end of 2008. Dana Gas' share of the well cost is budgeted at $6.1m.

The 2008 Budget has been approved by the partners and final approval by the JDA was granted at the Management Committee Meeting held December 11, 2007 in Abuja, Nigeria.

'This is a major development for Dana Gas in Africa,' said Rahid Saif Al Jarwan, Dana Gas General Manager. 'We are very pleased that we have obtained the approval of JDA, which will have a significant impact on our business in the African Continent.'

The Nigeria-São Tomé & Príncipe Joint Development Zone (JDZ) is an area of overlapping maritime boundary claims that is being jointly developed by the two countries. The Heads of State of Nigeria and of São Tomé & Príncipe agreed on the joint development of resources in this region, with agreements ratified in February 2001.

Dana Gas, currently the sixth largest gas producer in Egypt, has recently exceeded 2007 production goals by producing 32 thousand barrels of oil per day equivalent, which continuous to bring significant development potential to Egypt.

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