23 August 2012

Genel to farm in to Sidi Moussa Offshore Block, offshore Morocco and assume operatorship

23 August 2012 - Genel Energy announces that it has agreed to farm in for 60 per cent of the licence interests to explore for and produce oil and gas in the Sidi Moussa Offshore Block, offshore Morocco. As part of the Transaction, Genel Energy will assume operatorship

The current holders of Sidi Moussa comprise Serica Sidi Moussa B.V, San Leon Offshore Morocco B.V and Longreach Oil and Gas Ventures Limited, who collectively hold a 75 per cent equity interest (the "Vendors"). The remaining 25 per cent interest is held by the Office National des Hydrocarbures et de Mines ("ONHYM"). Under the terms of the Petroleum Agreement governing Sid Moussa, costs relating to ONHYM's 25 per cent interest are carried in full during the exploration and appraisal stage. 

Under the Transaction, Genel Energy will acquire a 60 per cent participating interest in Sidi Moussa from the Vendors pro rate according to their equity interests. The consideration comprises an initial payment of $1.3 million in recognition of past costs plus an exploration carry for the drilling of the commitment well required in the First Extension Period, of up to the first $50 million gross cost. These will be funded from the Company's existing cash resources. 

The Sidi Moussa Offshore Block is located offshore Morocco approximately 75 kilometres south west of Agadir. It covers an area of 7,624 square kilometres and lies in water depths between zero and 1,250 metres. Only one well has been drilled within the Sidi Moussa Licence area. Extensive 2D & 3D seismic work has been completed on these licences leading to the identification of a number of leads and prospects and confirming significant resource potential. 

The Transaction is conditional on the receipt of approval from the Government of Morocco. 

Commenting on the transaction, Dr. John Hurst Chief Operating Officer of Africa for Genel, said: "We are delighted to have reached this agreement to farm in to the Sidi Moussa Offshore Block, which together with other acquisition activity, is establishing a material position for Genel Energy in Morocco. It is consistent with our strategy of building a portfolio of high impact exploration assets within the Middle East and Africa."

Source: Genel Energy