Sterling Energy buys stake in Tullow’s C-10 block, off Mauritania
- Business & Finance
Sterling Energy plc has completed the acquisition of a 13.5% working interest in the production sharing contract for Block C-10, located offshore in the Islamic Republic of Mauritania (the PSC).
The stakeholders are now Tullow (Operator) with 76.5%, Sterling Energy with 13.5% and Société Mauritanienne des Hydrocarbures et de Patrimoine Minier (SMHPM) with 10%.
The PSC, awarded in 2011, is in the second phase of the exploration period (Phase 2) and covers Block C-10, offshore Mauritania, comprising an area of approximately 10,725km2. Phase 2 of the PSC is due to expire on November 30, 2017 and has a minimum work obligation of one exploration well.
Block C-10 lies in water depths of 50m to 2,400m with full legacy 3D seismic coverage, Sterling said. Tullow has matured a drill ready Neocomian carbonate prospect in water depth of approximately 100m.
The joint venture anticipates that an exploration well to test this prospect will be drilled in 2017. The gross cost of the well is likely to be substantially less than the $77m ($11.55m net to Sterling Energy) initially budgeted, given market conditions, Sterling Energy said. Should the joint venture not fulfil the minimum work obligation, the joint venture’s gross liability to the Government would be $7.5m ($1.125m net to Sterling Energy).
Following the completion of Phase 2, the joint venture may elect to enter into Phase 3 (with a 3-year term) with a minimum work obligation of 2 wells.
Sterling Energy and Tullow will carry SMHPM’s ten percent (10%) interest proportionally during the exploration period of the PSC.
The block is within a proven petroleum basin and offers exposure to multiple play-types from the under-explored Jurassic and lower Cretaceous carbonates to Cretaceous and Tertiary clastic plays.
Eskil Jersing, the company’s Chief Executive Officer said: “We are pleased to have the opportunity to partner with Tullow and SMHPM in the C-10 block in addition to the recent C-3 entry. As a result of recent play opening discoveries, this part of the West African margin has rapidly become an exciting new oil and gas province. The Company looks forward to de-risking the remaining potential on block, including the deeper shelf carbonate play, leading to an exploration well with Tullow in early 2017.”