Canadian Chauvco signs PSC's with Gabon

Chauvco has signed three new Exploration and Production Sharing Contracts (PSC's) with the Republic of Gabon. The Ngalo, Maga and Avomo Permits encompass 8,341 sq km (2.06 mm acres) and are contiguous with Chauvco's existing Remboue Permit and Mondah Bay Permit, in which Chauvco will earn a 50% interest through a farm-in arrangement.
The terms of the Ngalo, Maga and Avomo PSC's include two exploration periods, the first period being three years and the optional second period being two years. Chauvco's work commitments during the first exploration period include the reprocessing of existing seismic data and the drilling of five exploration wells. The commitment wells will be drilled to depths ranging from 500 meters to 1,500 meters. The fiscal terms negotiated on the permit include attractive royalties, profit oil splits and cost recovery terms to allow for the economic development of new discoveries.
The Maga and Avomo Permits are onshore in an area of tropical rainforest similar to the Remboue Permit with good access to the area by barge up the Remboue and Maga rivers. The Ngalo Permit is an onshore permit surrounding the capital city of Libreville and covering the shallow waters of the Estuaire du Gabon. It is anticipated that the oil produced from the permits would be moved to storage and offloading facilities at an existing export terminal on the coast.
The signing of these new Production Sharing Contracts with the Republic of Gabon fulfils Chauvco's desire to grow its business in Gabon through increased exploration and development activity. With these three new permits, Chauvco's gross landholdings in Gabon amount to 10,775 square kilometres (2.66 million acres), which makes the Company the fifth largest acreage holder in Gabon.
Chauvco continues to aggressively pursue the development of the Remboue Field and is currently drilling its eighth horizontal well in the field. All of the previously drilled horizontal development wells have been cased and completed for future production.Production tests have indicated the productive capability of the reservoir to be 700-1,500 barrels of oil per day per well. Chauvco anticipates that first oil production from the field will begin during the third quarter with the start-up production rate expected to be 7,500 barrels of oil per day.