ERHC Energy signs MoU for São Tomé and Príncipe EEZ

Dec 30, 2014 12:00 AM

ERHC Energy Incorporated, a publicly traded American company, largely owned by Nigerians and with oil and gas assets in Sub-Saharan Africa, has announced the signing of a Memorandum of Understanding (MoU) on an oil block in Sao Tome and Principe's Exclusive Economic Zone (EEZ).

In addition to its oil and gas exploration interests in the EEZ, the company also holds interests in the Republics of Kenya and Chad, and the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ).

The company said in a statement that the MoU on Block 11 was signed with an International Operating Company (IOC).

ERHC currently holds 100 percent interest in the block.

Under terms of the MOU, ERHC agreed to grant first right of refusal to the IOC for a farm-out of EEZ Block 11 for a period of six months.

Under the terms of the MOU, ERHC will keep the identity of the potential partner confidential except and until a definitive farm out is agreed on and entered into.

Until a definitive farm-out agreement is entered into and approved, ERHC continues to operate EEZ Block 11.

The work programme during the first four-year phase includes re-processing existing data, completing an aeromagnetic survey over the Block and acquiring 2,500 km of 2D seismic data.

EEZ Block 11 with an area of 8,941 square kilometres is situated directly east of the island of São Tomé and abuts the territorial waters of Gabon.

ERHC's preliminary studies on currently available data indicate the possibility of a significant cretaceous play in Block 11 similar to the Jubilee Field offshore Ghana. In a recent letter to the shareholders, the President and Chief Executive Officer of the company, Mr. Peter Ntephe noted that the company has made remarkable progress in Kenya with its exploration programme in Block 11A.

"With our operating partner, CEPSA Kenya Limited (a wholly owned affiliate of Compañía Española de Petróleos, SAU (CEPSA)), we are poised to proceed directly to drilling within the next 12 to 16 months, following the successful conclusion of our seismic survey on the Block this summer. Drilling will be contingent upon several conditions precedent, but the partners are pursuing the plans with the requisite zeal," he said.

In Chad, Ntephe said the successful completion of aero-magnetic/gravity studies had deepened geological understanding of the company's Chad Block BDS 2008 and enhanced its assessment of the prospectivity of already identified leads.

The company is currently raising funds through the issuance of convertible notes to pay for its exploration programme in Chad and other obligations.

ERHC Energy is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa and the development of undeveloped and marginal oil and gas fields.

The company has stated that it is committed to creating and delivering significant value for its stockholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production.

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