EnerGulf Resources Inc. (TSXV:ENG,FWB:EKS) has announced a strategic exploration agreement between Gazania 148 Investments (Pty) Ltd and EnerGulf Namibia Ltd., a 100 percent owned subsidiary of EnerGulf, for Offshore Block 1711, Republic of Namibia. As part of the agreement, a negotiated joint operating agreement for Block 1711 has been submitted to the Ministry of Mines and Energy and NAMCOR for review and approval. The terms of the Petroleum Agreement grant EnerGulf a 15 percent working interest, Gazania a 75 percent working interest, and NAMCOR a 10 percent carried working interest to production.
As quoted in the press release, highlights from the agreement include:
- Carried interest to EnerGulf until Gazania completes its work program obligations under the Agreement (includes all 3D offshore seismic, processing, interpretation, and other operating and exploration expenses) and a drill site is approved by the Technical Advisory Committee comprised of the parties and government (“TAC”);
- No direct costs to EnerGulf until the first day of the month after approval of a drill site by the TAC (18-24 months);
- Defined course of exploration operations to meet all industry standards in the development of two independent geological and geophysical constructs for Block 1711;
- Meaningful input for EnerGulf in the development of the work program and selection of an optimal drill site;
- Joint marketing for the mutual benefit of all parties;
- Separate marketing after all joint marketing has been completed.
EnerGulf President, John D. Elmore, said:
- The Strategic Exploration Agreement and Operating Agreement provide no direct costs to EnerGulf for a high quality geological and geophysical program for Block 1711 that is expected to cost between $25 and $40 million. The Agreement also provides for enhanced marketing opportunities under its joint marketing terms. EnerGulf is excited to work with Gazania and expeditiously move the Block 1711 program forward and to its successful development, especially as Repsol and its partners are currently drilling a well on Block 1911 offshore Namibia, two blocks due south of Block 1711.