You are here

Sterling buys into Mauritania offshore block with Tullow Oil

10th February 2015

Sterling Energy has, through its wholly owned subsidiary Sterling Energy Mauritania Limited, signed a sale and purchase agreement with Tullow Mauritania Limited (Tullow) to acquire a 40.5 per cent interest in the Production Sharing Contract for Block C-3, located offshore in the Islamic Republic of Mauritania

Sterling Energy has, through its wholly owned subsidiary Sterling Energy Mauritania Limited, signed a sale and purchase agreement with Tullow Mauritania Limited (Tullow) to acquire a 40.5 per cent interest in the Production Sharing Contract for Block C-3, located offshore in the Islamic Republic of Mauritania
The PSC, awarded in 2013, is in the first phase of the exploration period and covers Block C-3, offshore Mauritania, comprising an area of approximately 9,800 square kilometres

“We are very pleased to be joining Tullow in Block C3 in Mauritania, which we consider to be highly prospective,” said Alastair Beardsall, Sterling Energy Plc’s chairman. “Block C-3 has an active work program and we look forward to working with Tullow in the exploration of this largely unexplored block.”

The current holders of the PSC are Tullow Mauritania Limited (operator) with 90 per cent interest and Société Mauritanienne Des Hydrocarbures Et Du Patrimoine Minier (SMH) with 10 per cent.

Under the terms of the SPA, on completion Sterling will assume a 40.5 per cent participating interest in the PSC from Tullow, including an entitlement to a corresponding interest in all past costs; and Sterling will pay Tullow approximately USD 2.5m in consideration and repayment of past costs.

Completion of the transaction remains subject to the approval by the government of Mauritania.

Following completion, the holders of the PSC will be Tullow Mauritania Limited (operator) 49.5 per cent, Sterling Energy Mauritania Limited 40.5 per cent and SMH 10 per cent.

Sterling will finance the acquisition through existing cash resources.

The PSC, awarded in 2013, is in the first phase of the exploration period and covers Block C-3, offshore Mauritania, comprising an area of approximately 9,800 square kilometres. Phase 1 of the PSC is due to expire on 30 June 2016. Tullow has acquired 1,600 kilometres of 2D seismic in 2014 which will be processed during 2015. Completion of the acquisition and processing of the 2D seismic data represents the minimum work obligation during Phase 1.

Following completion of Phase 1, the joint venture may elect to enter into Phase 2 and Phase 3 (each with a three-year term) with a minimum work obligation of 700 square kilometres of 3D seismic and one well; and one well, respectively.

Sterling and Tullow will carry SMH’s 10 per cent interest proportionally during the exploration period of the PSC.

This shallow water block lies in an underexplored area of the Mauritanian shelfal region that has seen very limited drilling and seismic acquisition. Block C3 provides Sterling entry to both a multiplay exploration setting and to an emerging shelf margin play, the latter recently highlighted by the SNE-1 well (P50 of 330mmbbls) discovered by Cairn Energy to the south in Senegal. 

Related topics: 

Got a news tip? Email news@oilandgastechnology.net