ExxonMobil Corp. will acquire a 70% interest in the production sharing contract governing Block LB-13 off Liberia following Canadian Overseas Petroleum Ltd.’s acquisition of a 100% interest from the current owner.
ExxonMobil will pay COPL’s Bermuda unit $55 million plus the unit’s portion of the first well to be drilled to a maximum of $36 million. If less than $36 million is spent on the unit’s proportionate cost for the first well, the balance will be applied towards the unit’s costs of a second well if drilled.
ExxonMobil will also pay the unit’s share of joint venture costs estimated at $6 million up to the completion of the first well. The unit’s equity interest in the block will be 30% upon closing, and ExxonMobil will be the block’s designated operator.
National Oil Co. of Liberia’s approval is required for both transactions. Canadian Overseas and its Bermuda unit have agreed with the current owner, subject to certain conditions being satisfied or waived, to pay $85 million for a 100% interest in LB-13, including $45-50 million in cash and the rest common shares.
The 2,400 sq km block has an 8-year term that began in May 2007, divided into three phases of 4, 2, and 2 years. The second phase commenced in May 2011.
In 2010, 2,200 sq km of long-offset 3D seismic was shot to evaluate the oil potential of Cretaceous sands analogous to the recent deepwater oil discoveries off Ghana and Sierra Leone. Reviews of the seismic have identified the potential for a number of Cretaceous turbidite sand stratigraphic traps on the block that possess strong seismic AVO anomalies and other direct hydrocarbon indicators that possibly suggest the presence of hydrocarbons.