OER transfers operatorship of two Sao Tome and Principe blocks to Kosmos

Oando Energy Resources Inc. (“OER” or the “Company”) (TSX: OER), a company focused on oil and gas exploration and production in Nigeria and the Gulf of Guinea, announced the following transactions by its 81.5% held subsidiary, Equator Exploration Ltd (“Equator”), relating to its blocks in the Exclusive Economic Zone (“EEZ”) of the Democratic Republic of Sao Tome and Principe (“STP”). On February 19, 2016, Equator executed a Production Sharing Contract (“PSC”) with the National Petroleum Agency of STP (“ANP-STP”) for Block 12, taking an 87.5% participating interest with ANP-STP holding the remaining 12.5% as a carried interest.
Subsequently, Equator has farmed out a 65% participating interest and transferred operatorship in each of Blocks 5 and 12 to Kosmos Energy Sao Tome and Principe (“Kosmos”).
The Block 5 farmout transaction was approved by ANP-STP on February 19, 2016 and the Block 12 farmout transaction was approved on 31 March 2016.
Prior to the Block 5 farmout transaction, Equator held an 85% participating interest in the PSC for Block 5, with ANP-STP holding the remaining 15% as a carried interest. The PSC was signed in April 2012 and a 3D seismic survey of 1480 km2 was acquired in April 2015. After completion of both farmouts, the parties hold the following interests:
ANP-STP- Block 5, 15% Block 12, 12.5%
Equator- Block 5, 20% Block 12, 22.5%
Kosmos- Block 5, 65% Block 12, 65.0%
Block 5 has an area of 2,844km2 in water depths ranging from 2,000m to 2,500m. It was ranked highest in the EEZ by Equator with regard to hydrocarbon potential based on water depth, proximity to both the Equatorial Guinea shelf and the ancient Ogouee delta, and the presence of structural development related to basement faulting in the Cretaceous where oil has been found in Equatorial Guinea.
Block 12 has an area of 7,940km2 in water depths ranging from 2,500m to 3,000m. The block is situated within Zone B of the government block classification scheme, and within this group has been ranked the most attractive by Equator due to its proximity to the North Gabon salt basin and the presence of structural prospects located both on the footwall of the Ascension Fault and similar sub-parallel trends.
Source: Oando Energy Resources Inc.
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