Antler Global Ltd has signed a deal to sell 40 percent in the EG-08 production sharing contract offshore Equatorial Guinea to Fuhai (Beijing) Energy Ltd.
The transaction was announced Tuesday by London-based Europa Oil & Gas (Holdings) PLC, which owns 42.9 percent of Antler.
Antler would retain a 40 percent operating interest, Europa said. State-owned Guinea Equatorial de Petróleos owns 20 percent.
Fuhai, part of Dongying, China-based Fuhai Group New Energy Holding Co Ltd, would in return fund “95 percent of the costs (the Fuhai carry) of the Barracuda well, up to a cap of $53 million for the total well cost”, Europa said. “Antler shall fund the remaining five percent of the total well cost”.
“Any cost overruns above the $53 million cap will be shared equally between Fuhai and Antler”, Europa added.
“Upon commercial hydrocarbon sales Fuhai will have a preferential recovery right to recover the Fuhai carry. Forty-five percent of the Fuhai carry will accrue interest, capped at five percent per annum, which will accrue from funding until full recovery from asset cashflows. Interest will be canceled if the Barracuda prospect does not result in a commercial discovery”.
The transaction needs approval from authorities in the Central African country and Overseas Direct Investment approval from the Shandong provincial government, Europa said.
Antler expects to secure the approvals “within the coming months and as such have now entered a period of detailed engineering and procurement in order to spud the well as soon as possible”, said Europa chief executive William Holland.
Europa expects the drilling campaign for Barracuda to start next year.
“Following further geophysical analysis of the EG-08 block the prospective volumes have remained broadly in line with previous iterations whereby Antler now believes that the block contains 2.213 trillion cubic feet (Pmean), with the primary prospect being Barracuda”, Europa said.
The exploration block spans 731 square kilometers (282.24 square miles) in the Douala Basin and sits next to Chevron Corp’s Alen and Anseng fields, according to Europa.
Earlier this year Europa received a one-year extension to EG-08’s initial two-year term from Equatorial Guinea’s Hydrocarbons and Mining Development Ministry.
“As a result of the extension, the first sub-period of phase I of the PSC will expire on 4 October 2026”, Europa said in a press release October 6.
To contact the author, email jov.onsat@rigzone.com
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