17 November 2011, Sweetcrude, Calgary – Candian Overseas Petroleum (COP) has announced it has agreed to sell Exxon Mobil a 70% operating interest in its still-pending purchase of an offshore Liberian block.
The Calgary, Canada-based player said that the US supermajor’s Liberian subisidiary would secure the stake as soon as the sale of 100% of Block LB-13 by Peppercoast Petroleum is closed.
The sale, which was first announced in May, still requires approval of the National Oil Company of Liberia (NOCAL) and the Liberian government as well as customary conditions.
In return, ExxonMobil will pay COP $55 million, front COP’s share of the drilling costs up to $36 million and pay a further $6 million of COP’s share of the joint venture costs – estimated at $6 million – on completion of the first well.
“Discussions are ongoing between the current block owner, COP, the government and NOCAL but consent has not yet been forthcoming, and there is no assurance that such consent will be granted”, COP cautioned in a statement.
COP is paying Peppercoast Petroleum $85 million to acquire the block, using $45 million to $50 million in cash and issuing around 62,000 to 71,000 common shares at $0.54 each.
The 2400 square kilometre block is under an eight-year production sharing contract that starte four years ago. Block LB-13 covers an area of approximately 2,400 square kilometres.
An independent report by DeGolyer and MacNaughton gave a mean estimate of gross prospective oil resources recoverable of 2.489 billion barrels.
COP president Arthur Millholland said he believed the block could be the catalyst for greater exploration of the Liberian basin and subsequent development of the local oil and gas industry.
COPL is an oil and gas exploration company focused in the UK North Sea and the offshore
West African continental margin. Its shares are listed on Toronto’s Venture Exchange.