Canadian Overseas Petroleum Ltd. (COPL) said Sept. 14 that Shoreline Canadian Overseas Petroleum Ltd. (ShoreCan), its 50% owned affiliate, completed the acquisition of 80% of Essar Exploration and Production Ltd. (Nigeria).
Essar Nigeria's sole asset is full interest and operatorship of OPL 226 located 50 kilometers (km) offshore in the central area of the Niger Delta.
OPL 226 has an area of 1,530 sq km in 40 m to 180 m of water. It offers oil appraisal and development opportunities, near-term oil production potential and significant exploration upside.
On OPL 226, five wells have previously been drilled. The first oil discovery was made in 2001 in the fifth well after earlier drilling intersected predominantly gas-bearing sands.
According to a report from Netherland, Sewell & Associates Inc., the gross unrisked contingent oil resources recoverable for the primary Noa West oil discovery are a low estimate of 11.5 million barrels (MMbbl); a best estimate of 16.1 MMbbl; and a high estimate of 20.7 MMbbl.
Under the terms of the production-sharing contract (PSC) governing OPL 226, Essar Nigeria must seek ministerial consent for the transaction. The parties in the transaction are awaiting its approval.
Essar Nigeria was recently granted an extension to the first phase of the PSC to Dec. 31, 2017. The remaining commitment on the first phase of the PSC is the drilling of one well.
COPL's technical team has identified a drilling location, which will be offset to the 2001 oil discovery, which was made by a previous contract holder.
Under the acquisition’s terms, ShoreCan will take over management and have a majority of directors on Essar Nigeria’s board, effective immediately.
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