Sterling Energy acquires interest in Tullow’s Block C-10 offshore Mauritania
LONDON -- Sterling Energy has completed the sale and purchase agreement between its wholly owned subsidiary, Sterling Energy Mauritania Limited (SEML), and Tullow Mauritania to acquire a 13.5% working interest in the production sharing contract (PSC) for Block C-10, located offshore the Islamic Republic of Mauritania.
The holders of the PSC are Tullow (operator, 76.5%), SEML (13.5%) and Société Mauritanienne des Hydrocarbures et de Patrimoine Minier (10%).
The PSC, awarded in 2011, is in the second phase of the exploration period and covers Block C-10, offshore Mauritania, comprising an area of approximately 10,725 km2. Phase 2 of the PSC is due to expire on Nov. 30, 2017, and has a minimum work obligation of one exploration well.
Block C-10 lies in water depths of 50 m to 2,400 m, with full legacy 3D seismic coverage. Tullow has matured a drill ready Neocomian carbonate prospect in a water depth of approximately 100 m.
The joint venture anticipates that an exploration well to test this prospect will be drilled in 2017. The gross cost of the well is likely to be substantially less than the $77 million initially budgeted, given market conditions. Should the joint venture not fulfill the minimum work obligation, the joint venture’s gross liability to the government of Mauritania would be $7.5 million.
Exploration potential
Following the completion of Phase 2, the joint venture may elect to enter into Phase 3 (with a three-year term) with a minimum work obligation of two wells.
SEML and Tullow will carry SMHPM’s 10% interest proportionally during the exploration period of the PSC.
The block is within a proven petroleum basin and offers exposure to multiple play-types from the under-explored Jurassic and lower Cretaceous carbonates to Cretaceous and Tertiary clastic plays.
Block C-10, along with the recently completed entry to Block C-3, provides SEML entry to a multi-play exploration setting on an emerging shelf margin; the latter recently highlighted by the SNE-1 well (P50 of 330 MMbbl) discovered by Cairn Energy to the south in Senegal. Exploration success has continued in the basin with the April 2015 Tortue-1 deepwater gas discovery (P50 of 8TCF) announced by Kosmos Energy in Block C-8, offshore Mauritania.
“We are pleased to have the opportunity to partner with Tullow and SMHPM in the C-10 Block in addition to the recent C-3 entry. As a result of recent play opening discoveries, this part of the West African margin has rapidly become an exciting new oil and gas province," Eskil Jersing, the company’s CEO, commented.
