VANCOUVER, BC, March 21, 2022 /CNW/ - Canada Energy Partners
Inc. (NEX: CE.H) (the "Company") today announced
that it has negotiated and signed two separate Letters of Intent,
one with a private oil compmay based in the UK and the second
with a private, domestic oil producer based in Gabon, West
Africa.
"These Letters of Intent are the first steps in pairing
our technical expertise with local producers to acquire assets
previously identified and owned by International Oil Companies in
Gabon that have rationalized their
portfolios," said Grant Hall,
President of Canada Energy Partners. "It is our intent to build
long and mutually beneficial relationships with oil industry
professionals in Gabon that
possess above average oil and gas assets."
The first Letter of Intent provides for the Company to acquire a
1.69% interest in a 166.7 KM2 prospective
licensed property. Within the licensed property there are 7
identified assets, of which 4 are onshore and 3 offshore in shallow
water. The second Letter of Intent provides for the Company to
acquire a 38.31% interest in the largest of the 7 identified
assets. Ultimately, the Company will acquire a total of 40%
interest in the largest onshore asset.
The Letter of Intent with the domestic oil producer based in
Gabon requires the Company to make
cash payments in the aggregate amount of $2,500,000 US. The Company will
commit to a capital expenditure program of $7,000,000 US to begin as soon as approvals and
due diligence reviews have been completed. The capital
commitments will fund the drilling of two horizontal wells on the
asset where a previously drilled well was successfully tested
before being shut in.
The Letter of Intent with the UK company requires the Companhy
to make a cash payment of $2,000,000
US and royalty payments to commence 6 months after commercial
production begins of $4,000,000 over
4 years.
The favourable terms under the Profit-Sharing Agreement with the
Government of Gabon covering the
concessions under the Letters of Intent, combined with the current
favorable oil prices is expected to allow the Company to recoup all
of its advance payments and capital expenses on an expedited basis
after commencement of production. The postivive cash flow from
these concessions can then be used to organically grow the
Company's oil assets without the requirement for any further
diluting financings.
The Company's rights under the Letters of Intent are in a
concession comprising of 166.7 km2 total gross area and included
de-risked exploitation opportunities in 4 onshore and 3 offshore
shallow water fields.
About Gabon:
- Country of 267,700 km² in Central
Africa.
- Combination of offshore and onshore fields.
- Legal terms: Production Sharing Contract (PSC).
Production:
- Gabon is a mature oil province
with First Oil in 1957.
- It contains mature infrastructure for production and export,
providing tie back opportunities for small/medium size field.
- Peak oil at 220,000 bopd in 1997 with Rabi Giant.
- Gabonese government is encouraging new development to halt
production declines. Current Daily production: between 180 – 200
kbopd.
On behalf of the Board of Directors of
Canada
Energy Partners Inc.:
Grant Hall
President
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re-surgence of the COVID-19 Pandemic, etc. Readers are cautioned
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SOURCE Canada Energy Partners Inc.