N. Somalia exploration effort planned

Oct. 12, 2006
Canmex Minerals Corp., Vancouver, BC, signed a nonbinding agreement to take a farmout from Range Resources Ltd., Perth, on two blocks in the nonproducing Nogal and Al Medo/Darin basins onshore between the Gulf of Aden and Indian Ocean in northern Somalia.

By OGJ editors
HOUSTON, Oct. 12 -- Canmex Minerals Corp., Vancouver, BC, signed a nonbinding agreement to take a farmout from Range Resources Ltd., Perth, on two blocks in the nonproducing Nogal and Al Medo/Darin basins onshore between the Gulf of Aden and Indian Ocean in northern Somalia.

Completion is expected by yearend.

The basins lie across the Gulf of Aden from Yemen, which had a 23% success rate and average discovery size of 96 million boe recoverable in 1994-2006, Range noted. The Somali record is 11 oil and gas discoveries, none producing, out of 60 wildcats drilled in 580,000 sq km of sedimentary basins.

The basins with the acreage covered under the agreement are identical to Yemen's productive basins, Range said.

The agreement calls for Canmex to become operator and spend $50 million to earn an 80% interest in the two blocks in Puntland State. The minimum work program is two exploration wells in each basin.

Of the 80% interest, one fourth in one or both basins is available to third parties on terms agreeable with Range and Canmex.

The companies have received expressions of support from the Puntland and Transitional Federal Government of Somalia.