2009-05-18-2009-05-14

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
MM
Description

To farm into Ogueyi license in Gabon for 50% WI.

Addax Petroleum Corp., Calgary, (Toronto, London: AXC) plans to farm into an onshore Gabon license by funding an exploration well in the Ogueyi licence area with the potential to earn a 50% interest in the license. London-based Perenco is operator of the Ogueyi license and has recently spudded the exploration well targeting the Azango prospect. Addax president and chief executive Jean Claude Gandur says, "We are pleased to have acquired a potential interest in the Ogueyi licence area as this continues our strategy to build our property portfolio around core producing areas. This is also a demonstration of Addax Petroleum's commitment and concerted focus on growth from exploration and provides good potential for an almost immediate impact to the corporation." The Ogueyi license area is an exploration block with a gross area of 1,339 square kilometers (330,900 acres) on the eastern edge of the Port Gentil Basin. The basin produces mainly offshore from post salt formations of late Cretaceous age. The operator of the Ogueyi license area has identified several prospects and leads on the block, which is covered by a suite of approximately 2,551 kilometers of 2-D seismic data. The Azango prospect in the Ogueyi license area was spudded in early May and is expected to reach a total depth of 1,685 meters in June. Operations for the Ogueyi license area are conducted under a production-sharing contract, which is in its second exploration phase due to expire in July, however, a two-year extension has already been negotiated by the operator. The commitments under the second exploration phase will be fulfilled with the drilling of the Azango prospect. Addax has agreed to fund the Azango exploration well up to a maximum cost of C$8 million. In addition, Addax has the option to make additional staged payments to Perenco based on future exploration results in order to obtain a 50% interest in the license area. The Gabon government retains a 10% back-in right in the event of a commercial development.