Total E&P South Africa BV has taken and the South African government approved a farmout from Canadian Natural Resources Ltd. on deepwater block 11B/12B in the Outeniqua basin offshore South Africa.
In exchange for a 50% working interest in the block and the right to operate, CNR received an undisclosed upfront cash payment, recovery of 50% of past costs, and a carry in the first exploratory well drilled up to a gross cost of $150 million.
The first well is to be drilled in 2014. In the event of a successful multiwell program to define the prospect and subsequent commercial development, additional consideration will be received.
The block covers 19,000 sq km in 200-1,800 m of water 175 km off South Africa’s southern coast. CNR has undertaken extensive seismic on the block, and the two companies will work to finalize a location for the first exploratory well.
The block lies southeast of Mossel Bay and east of established oil and gas-condensate fields.
Canadian Natural said it received a number of strong, competitive offers from well-known industry participants to partner with CNR on the blocks.