Sterling Energy Mauritania Ltd. (SEML) signed a sale and purchase agreement with Tullow Mauritania Ltd. to acquire interest in a block offshore Mauritania, parent company Sterling Energy Plc said June 3.

SEML acquired a 13.5% interest in the production sharing contract (PSC) for Block C-10. The PSC was given in 2011 and the exploration period is phase 2. The current phase will expire on 30 November 2017 and has a minimum work obligation of 1 exploration well.

The joint venture (JV) plans to drill the exploration well for Block C-10 in 2016. The well’s gross cost could be US$77 million. The JV could enter a phase 3 with a minimum work obligation of two wells after phase 2 is complete, Sterling said.

Block C-10 covers about 10,725km, surrounding Chinguetti Field in 50m to 2,400m of water. There is 3-D seismic coverage. There is a proved petroleum basin and there are multiple play types including Jurassic, Cretaceous and Tertiary clastic. The Cenomanian and Albian plays, found by the Tortue-1 well drilled by Dallas-based Kosmos Energy, could be extended. These plays are in Block C-8, Sterling added.

U.K.-based Sterling said Tullow Mauritania Ltd. is the operator of Block C-10, with 90% interest. Société Mauritanienne des Hydrocarbures et de Patrimoine Minier holds 10%. Tullow Mauritania identified a drill-ready Neocomian carbonate prospect in about 100m of water. Technical work will focus on the prospect’s maturation after 3-D seismic data is received, the company added.

Under the sale and purchase agreement, SEML will assume a 13.5% participating interest in the PSC from Tullow, including an entitlement to some past costs. SEML will also pay Tullow US$50,000 in cash for interim period costs.

The government of Mauritania must approve the Block C-10 transaction before it can be completed. When it is complete, Tullow Mauritania will be operator, with 76.5% interest. SEML will have 13.5% interest and SMHPM will have 10%.

SEML will finance the acquisition through existing cash resources.

Offshore