UK independent Sterling Energy has had the exploration period for two frontier blocks northwest of Madagascar extended.
The AIM-listed explorer reported that its deepwater Ambilobe and Ampasindava blocks off Africa’s east coast received Ministerial and Presidential approval initially in October last year to have their current phases extended to July 2016. These approvals have now been formally sanctioned. Both blocks feature water depths ranging out up to 2,000 m (6,562 ft).
The Ambilobe Production Sharing Contract (PSC) was awarded in 2004 and is presently in its second exploration phase, with all minimum work commitments for the phase completed. In December 2013 Sterling completed a farm-out with Pura Vida Mauritius under which all costs associated with the acquisition of a discretionary 3-D seismic programme, up to a maximum of US $15 million, are carried by Pura Vida.
Sterling and Pura Vida each hold a 50% interest in the block, with Sterling the operator. Planning for the seismic programme is still ongoing, although Sterling says it is expected to kick off in the next few weeks.
The Ampasindava PSC was also awarded in 2004 and is in Phase 3 of its exploration period. Sterling holds a 30% non-operated working interest in the block, which is operated by ExxonMobil E&P (Northern Madagascar) Ltd. with a 70% working interest. Under the terms of the farm-in by ExxonMobil in 2005, Sterling’s share of exploration costs in this block is carried up to a fixed gross amount of US $30 million, with the company currently looking for a further farm-in partner.
Sterling’s Executive Chairman, Alastair Beardsall, said that work was continuing on understanding the subsurface potential of the two large and still undrilled blocks, which span the Majunga and Ambilobe basins. The seismic programme is aiming to mature the best leads to one or more drill-ready prospects prior to the expiry of Phase 2 on Ambilobe, as Phase 3 (if entered) will have a commitment to drill an exploration well.
In the Ampasindava PSC there is already an identified but high-risk four-way dip structure prospect called Sifaka, independently assessed to potentially hold gross best-estimate prospective resources of 1.2 Bbbl. A well is currently scheduled for drilling by the end of this year or early 2016.
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