Sterling Energy Mauritania Ltd., wholly owned subsidiary of Sterling Energy Plc (LONDON: SEY.L), signed a sale and purchase agreement with Tullow Mauritania Ltd., Sterling Energy Plc said Feb. 10.
Sterling Energy Mauritania will acquire a 40.5% interest in the production sharing contract (PSC) for Block C-3 offshore the Islamic Republic of Mauritania, the company added.
The shallow-water block is in an underexplored area of the Mauritanian shelfal region. Block C3 will give Sterling Energy Mauritania a multiplay exploration and emerging shelf opportunity.
The PSC, awarded in 2013, is in Phase 1 of the exploration period. Block C-3 is an area of about 9,800 sq km. Phase 1 is scheduled to expire June 30, 2016, Sterling Energy Plc said. Tullow Mauritania acquired 1,600 km of 2-D seismic in 2014 which will be processed this year.
After Phase 1 is completed, the joint venture might enter Phase 2 and Phase 3, each of which will have a three-year term. Phase 2’s minimum work obligation is 700 km of 3-D seismic, and Phase 1’s is one well, the company said.
Sterling Mauritania and Tullow Mauritania will carry SMH’s 10% interest.
Tullow Mauritania Ltd. is the operator, and is a 90% holder of the PSC, Sterling Energy Plc said. It is a subsidiary of Tullow Oil Plc (OTC: TUWOY).
Societe Mauritanienne Des Hydrocarbures Et Du Patrimoine Minier (SMH) is a 10% holder.
Sterling Mauritania will assume a 40.5% participating interest in the PSC from Tullow Mauritania, including entitlement to a corresponding interest in all past costs.
Sterling will also pay Tullow about US$2.5 million in consideration and repayment of past costs.
Existing cash resources will finance the transaction, Sterling Energy Plc said.
The transaction is subject to the Government of the Islamic Republic of Mauritania’s approval before it is completed, the company said.
When the transaction is complete, the PSC’s holders will be operator Tullow Mauritania with 49.5% interest, Sterling Energy Mauritania with 40.5% interest and SMH with 10% interest.
“We are very pleased to be joining Tullow in Block C3 in Mauritania, which we consider to be highly prospective. Block C-3 has an active work program and we look forward to working with Tullow in the exploration of this largely unexplored block,” said Alastair Beardsall, Sterling Energy Plc’s chairman.
Matthew Bowyer, Sterling Energy Plc’s exploration manager, reviewed all technical information.
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