Madagascar Oil Give Company Update

Madagascar Oil provides the following update on the status of its operations, the Partner Process, its financial position and its funding situation, including the potential requirement for the Company to propose a delisting of Madagascar Oil from AIM.
The Company is also pleased to announce the granting of the Environmental Permit for the Tsimiroro Block 3104 Phase 1a Exploitation by the Office Nationale de l’Environnement (“O.N.E.”) of Madagascar and the signing of the Environmental Management Programme (“PGE”). This is the first Environmental Permit issued for an oil exploitation project in Madagascar.
Terms used in this announcement have the same meaning as in the Company’s announcement of 29 September 2015.

    OPERATIONAL UPDATE

The Group continues to operate the Steam Flood Pilot Facility in Madagascar and currently has over 150,000 barrels of Tsimiroro Crude in its storage tanks at the Tsimiroro Block 3104. Under the Tsimiroro Development Plan, the Group is permitted to undertake domestic sales of its Tsimiroro Crude and the Group is in the process of negotiating offtake agreements with local power suppliers. Whilst it is in advanced negotiations with Symbion Power regarding a Fuel Supply Agreement for the Mandroseza power station, no sales agreement has been concluded and there have been no sales to date. Pursuant to the terms of the Bridge Facility, any revenues from oil sales (less associated transportation costs) are to be applied to repaying amounts outstanding under the Bridge Facility.
On 29 September 2015, the Company announced that, due to storage capacity constraints at the Tsimiroro Facility and in response to the challenging oil price environment that continues to persist today, the Group had decided to scale down operations and production from the Steam Flood Pilot, until such time as an offtake agreement has been signed for the domestic sale of Tsimiroro Crude and the Partner Process has come to a successful conclusion. The scale down is being implemented according to plan, including shut down of steam injection and managed reduction of production to an average daily-rate of 100-150 barrels of oil per day (“bopd”).
madagascar As announced by the Company on 15 December 2014, Madagascar Oil S.A. has formally requested a two year extension of the exploration periods for blocks 3105, 3106 and 3107 from the Malagasy Government. This formal request was made ahead of the scheduled end date of the current exploration periods and the Group remains hopeful of receiving these extensions in the near future.
Chief Executive Officer, Robert Estill, commented:

“The granting of this Environmental Permit is a significant milestone for the country and for the Company, as it is the first ever permit for the petroleum exploitation industry in Madagascar. We engaged in open and close dialogue with the National Environment Office and public institutions the process of ESIA assessment and we are looking forward to continuing in this manner. With this permit, Madagascar Oil’s goal is to be an exemplary company in the petroleum industry as we proceed with the Tsimiroro field development.”

More: ENVIRONMENTAL PERMIT APPROVAL, PARTNER PROCESS UPDATE
Source: Madagascar Oil
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