Sterling Energy PLC Update on Block C-10, Mauritania (4316V)
November 02 2017 - 9:06AM
UK Regulatory
TIDMSEY
RNS Number : 4316V
Sterling Energy PLC
02 November 2017
2 November 2017
Update on Block C-10, Mauritania
Sterling Energy plc (the 'Company' - Ticker Symbol: SEY), the
AIM listed upstream oil and gas company with interests in Africa,
announces that the Operator, Tullow and Sterling through its wholly
owned subsidiary Sterling Energy Mauritania Limited ('SEML') have
submitted a notice to not enter the Third Renewal Period in
relation to Block C-10, offshore Mauritania and exit the block on
the 29 November 2017.
Block C-10
The PSC, awarded in 2011, is in the second phase of the
exploration period ('Phase 2') and covers Block C-10, offshore
Mauritania, comprising an area of approximately 10,725km(2) . Phase
2 of the PSC is will expire on 30 November 2017 and has a minimum
work obligation of 1 exploration well.
Block C-10 lies in water depths of 50m to 2,400m with full
legacy 3D seismic coverage. On entry in early 2015, Tullow had
matured a drill ready Neocomian carbonate prospect in water depth
of approximately 100m. The joint venture originally anticipated
that an exploration well to test this prospect would be drilled in
2017, this will not be satisfied prior 30 November 2017.
The Operator, on behalf of the joint venture, has been
negotiating with the Government to secure a one year extension
through a new 3D survey. To date, the Government has stated that
this work obligation proposal does not warrant an extension to the
second term.
Subsequent, SEML has determined that whilst the acreage is
prospective, there is insufficient commercial justification in
entering Phase 3 (3 year term), with a minimum work obligation of 2
wells.
Given that the joint venture will not fulfil the minimum work
obligation, the gross penalty payment due to the Government will be
$7.5m ($1.125m net to SEML).
Comment
Eskil Jersing, the Company's Chief Executive Officer
commented:
"Our entry into the C-10 block, was prefaced on extensive
subsurface work demonstrating potential for both untested inboard
Neocomian carbonate and outboard Cenomanian to Albian plays, the
latter proven by Kosmos. However, subsequent technical and economic
modelling has not matured a viable hub scale opportunity on
block.
We entered the acreage in early 2015, at low cost and capital
exposure together with exit options that we felt were of the
appropriate risk profile for the block potential. It is unfortunate
that we have been unable to define commercially viable hub scale
opportunities on the block in this exploration period.
As a result our relatively low cost exit of $1.125m net SEML is
in-line with our consistently disciplined approach to exploration
asset execution and capital allocation.
We would like to thank Tullow and Société Mauritanienne des
Hydrocarbures et de Patrimoine Minier - SMHPM, for their
partnership and support on the block."
Qualified Person
In accordance with the guidelines of the AIM Market of the
London Stock Exchange, Mr Anish Airi, Subsurface Manager of the
Group, who has been involved in the oil industry for over 20 years,
is the qualified person that has reviewed the technical information
set out above.
Further Information
Further information can be found on the Company's website at
www.sterlingenergyplc.com
Sterling Energy plc Tel: +44 20 7405 4133
Eskil Jersing (CEO)
Peel Hunt LLP Tel: +44 20 7418 8900
Richard Crichton
Ross Allister
This information is provided by RNS
The company news service from the London Stock Exchange
END
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