RPS provides updated CPR for Azonto’s Gazelle field (Ivory Coast)

Azonto has announced the completion of an updated Resources Report (Competent Persons Report or “CPR”) for Block CI-202 offshore Cote d’Ivoire prepared by RPS Energy Services Pty Ltd (“RPS”) on behalf of Vioco Petroleum Ltd, Azonto’s 35% owned affiliate, as operator of the block.

The new CPR updates the previous CPR for Block CI-202 dated 15 January 2013, also prepared by RPS, specifically in relation to the Gazelle Field following further analysis of the results of the 2012 drilling programme and the 2012 3D seismic data, and in light of the revised Field Development Plan (“FDP”) submitted in January 2014. The new CPR includes for the first time production profiles for the Gazelle Field and economics based on the terms of the new Production Sharing Contract signed in November 2013.

The gross field contingent resources targeted by the proposed FDP are 47 bcf of gas plus 0.9 mmbbls of condensate on a 1C basis, and 92 bcf of gas plus 1.8 mmbbls of condensate on a 2C basis. The resources are classified as contingent since the proposed FDP has yet to be approved and final investment decision (“FID”) on the project has not yet been taken. The 1C, 2C and 3C resources net to Vioco are shown in the table below, both with and without PETROCI’s back-in for an additional 16% interest (at its election). Vioco’s current participating interest of 87% would fall to 71% should PETROCI exercise its back-in option. PETROCI is the state owned oil and gas company in Cote d’Ivoire.

The Net Present Value (“NPV”) to Vioco in each case has been computed based on estimates of capex and opex provided by Vioco and assuming a gas sales price to achieve NPV breakeven on the project for the 1C case, in accordance with the terms of the Memorandum of Understanding signed with the Ministry of Petroleum & Energy in September 2013. Condensate prices were based on a long term forecast for Nigerian Bonny Light crude, which typically trades at a slight premium to Brent.

The new CPR did not consider contingent or prospective resources outside the Gazelle Field. The previous CPR detailed additional gross mean contingent resources on Block CI-202 of 128 bcf of gas and 37.3 mmbbls of oil or condensate, together with gross mean unrisked prospective resources of 2,936 bcf of gas and 898 mmbls of oil or condensate.

Azonto is working closely with Vitol E&P, its partner in Vioco to progress negotiations with the relevant entities in Cote d’Ivoire on the gas sales agreement and the mechanics of gas transportation from Vioco’s shore-based processing plant, in order to be able to take the FID on the Gazelle development as rapidly as possible.

Commenting on today’s announcement, Azonto’s Managing Director, Rob Shepherd said: “We are pleased that the results of the independently prepared Resources Report are in line with the technical assumptions developed by Vioco, thereby confirming the quality of the work undertaken and moreover the resources that are to be developed from the Gazelle field. We look forward to updating the market on the progress towards FID in due course.”