Nigeria deal may be marginal field template

The Nigerian government has approved a marginal oil field farmout that a Houston firm believes could serve as a template for commercialization of several hundred undeveloped oil discoveries in the Niger Delta.

Jul 3rd, 2007

By OGJ editors
HOUSTON, July 3 -- The Nigerian government has approved a marginal oil field farmout that a Houston firm believes could serve as a template for commercialization of several hundred undeveloped oil discoveries in the Niger Delta.

The government approved the farmout by ExxonMobil Corp.'s Mobil Producing Nigeria Unlimited unit and Nigerian National Petroleum Corp. of Ebok oil field on OML 67 to Oriental Energy Resources Ltd., Abuja.

Ebok, discovered in 1968, is in 150 ft of water 30 miles off Nigeria near borders with Equatorial Guinea and Cameroon. Production of the field's 37° gravity oil could start as early as 2009.

Sovereign Oil & Gas Co. II LLC, Houston, conceived and negotiated the Ebok farmout on Oriental's behalf to compensate Oriental for partial loss of OML 115 that resulted from the 2000 maritime boundary treaty between Nigeria and Equatorial Guinea. That treaty facilitated ExxonMobil's development of giant Zafiro oil and gas field on Block B off Equatorial Guinea.

Sovereign has established a data room in Houston for Oriental's farmout to a qualified technical advisor of a 40% participation interest in Ebok, which has three untested wells as deep as 5,298 ft, one of which cut 271 ft of net oil pay in four sands at 2,600-3,600 ft.

Sovereign previously handled the farmout of nearby Okwok oil field to Oriental (OGJ Online, July 3, 2006). Oriental drilled four wells in Okwok in 2006 and plans to drill two more in 2007 with partner Addax Petroleum Corp., Calgary, which acquired 40% participating interest in Okwok in June 2006.

Mobil contributed Ebok field to Nigeria's marginal field program, and Nigeria in 2001 granted Oriental exclusive negotiating rights to take the Okwok and Ebok farmouts from Mobil as compensation for its loss to ExxonMobil in Equatorial Guinea waters.

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