United Oil & Gas PLC, London, has entered an option agreement to acquire 20% of the Block B production-sharing contract in Benin from Elephant Oil Ltd., Tonbridge, UK.
The 1.1 million-acre block is in the Dahomey Embayment west of Cotonou.
The basin has had no drilling in Benin, but Dahomey Embayment wells along the coasts of Ghana and Nigeria have encountered hydrocarbons. Oil and gas seeps have been reported in water wells in Block B, United said.
“An extensive tar belt, potentially indicating the migration of oil through the targeted Cretaceous stratigraphy of Block B, has been reported to the northeast of the area,” the company said.
Elephant Oil has identified a prospect called Allada in the area.
United agreed to fund passive seismic data acquisition and field studies up to $175,000. The passive seismic program is to be completed in April.
If it exercises the option, United will fund 30% of nondrilling and 20% of drilling costs in the first phase approved under the PSC. It also will pay Elephant $260,000 for one fourth of the pro rata past expenditure on the prospect and $780,000 in three, 6-month instalments.
