2011-05-31-2011-05-06

To buy 45% WI in block OML 42 in Nigeria, gaining low-case resource estimates of 57.3 MMBOE.

A consortium led by Nigeria-focused Neconde Energy Ltd. plans to purchase a 45% participating interest in Block OML 42 in Nigeria from state-owned Nigerian National Petroleum Co. for an undisclosed price.

The consortium includesKulczyk Oil Ventures Inc.; Nigeria-based NestOil Ltd.; Aries Energy & Petroleum Co. Ltd., an affiliate of Nigeria-based Yinka Folawiyo Group, Nigeria-based VP Global Ltd.

Neconde has also entered several ancillary agreements with Shell Petroleum Development Co. of Nigeria Ltd., Total E&P (Nigeria) Ltd. and Nigerian Agip Oil Co. Ltd. regarding the deal. Pro forma, the Neconde consortium will hold 45% interest in the block with Nigerian National Petroleum holding the remainder.

OML 42 is an 814-square-kilometer lease awarded in 1962. License expiry is currently 2019. Initial production commenced in 1969 at the Egwa Field, one of five productive fields within the license area, with a peak production of over 100,000 barrels of oil equivalent per day in 1974, with total production from all fields on the license peaking at approximately 250,000 barrels equivalent per day.

Production was shut in during 2005 due to security issues in the Niger Delta area. Production during 2004 was more than 50,000 barrels of oil per day and more than 80 million cubic feet per day.

Low-case resource estimates for the assets are 57.3 million barrels equivalent, mid-case are 126 million barrels and high-case are 232 million barrels.

The deal is expected to close by the end of September.