Sterling farms-out Kurdistan interest to Addax
Posted:06 October 2008
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UK-based independent Sterling Energy will retain a 66.67% interest in the Sangaw North Production Sharing Contract (PSC) after it has agreed to farm-out a 33.33% interest in the acreage located in the Kurdistan Region of Iraq, to Addax Petroleum Sangaw Limited.
Upon the assignment of a 20% Third Party Interest to the Korea National Oil Corporation, which was announced earlier in June, Sterling’s interest will be reduced to 53.33% and Addax Petroleum’s interest will be reduced to 26.67%. Sterling remains Operator.
Under the terms of the deal, Addax Petroleum will pay Sterling's past costs and Sterling's costs for the planned exploration work program of 2D seismic and the first exploration well in the Sangaw North Block.
The Block, which covers an area of 492 sq km, is located approximately 140 km south east of Erbil and 50 km south west of Suleimaniah. It lies in a highly prospective area, around 50 km south east of the giant Kirkuk oil field and on trend with Addax Petroleum's Taq Taq oil field and the Chemchemal oil and gas condensate discovery.
The block itself contains a large surface anticline with the potential for multiple reservoir intervals in the subsurface, a feature seen in many existing fields in the area.
Terra Seis, a Canadian seismic contractor, is currently acquiring 310 km of 2D seismic data over the block, using a combination of vibrator and dynamite sources depending on the terrain. The seismic acquisition programme is making good progress and the initial results from the seismic data are very encouraging. The survey is scheduled to finish in November.
Graeme Thomson, Chief Executive of Sterling, said, “We are making excellent progress in our exploration of the Sangaw North Block and in implementing our strategy of advancing near-term high potential prospects.
Our field work has identified a number of surface oil seeps, confirming the presence of a working petroleum system in the area, and with the good progress on the seismic programme.
“We are on track to spud our first exploration well in mid 2009. The fast pace of our exploration progress reflects our commitment to this very prospective acreage.”
Thomson added that the signing of the farm-out deal with Addax Petroleum, a leading international operator, with a strong acreage position and commitment to Kurdistan, underlines the potential of the Sangaw North Block.
He said in a statement Sterling will benefit from Addax Petroleum’s drilling experience in the region that will enhance Sterling’s ability to access high impact reserves at moderate exploration risk at the earliest opportunity.
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