Addax farms into Gabon license

Addax Petroleum Corp., Calgary, will farm into the Ogueyi license area onshore Gabon and fund an exploration well drilling the Azango prospect that will reach a TD of 1,685 m in June.

May 14th, 2009

Uchenna Izundu
OGJ International Editor

LONDON, May 14 -- Addax Petroleum Corp., Calgary, will farm into the Ogueyi license area onshore Gabon and fund an exploration well drilling the Azango prospect that will reach a TD of 1,685 m in June.

Addax will acquire a 50% interest in the license and join Perenco, the operator, to follow up several prospects and leads on the block that has 2,551 km of 2D seismic data. The Azango prospect in the Ogueyi license area was spudded in early May and is expected to reach a total depth of 1,685 m in June.

The Ogueyi license, which spans 1,339 sq km, is on the eastern edge of the Port Gentil basin, and this produces mainly offshore from post salt formations of late Cretaceous age.

Perenco's transfer of the 50% interest to Addax Petroleum requires the approval of the government of Gabon, which has a 10% back-in right in the event of a commercial development.

Jean Claude Gandur, president and chief executive of Addax Petroleum, said: "This is also a demonstration of Addax Petroleum's commitment and concerted focus on growth from exploration and provides good potential for an almost immediate impact to the corporation."

Perenco secured a 2-year extension for the production sharing contract, the second phase of which is due to expire. The commitments under the second exploration phase will be fulfilled with the drilling of the Azango prospect.

Under the terms of the farm-in with Perenco, Addax agreed to fund the Azango exploration well up to a maximum cost of $8 million. It has the option to make additional staged payments to Perenco based on future exploration results in order to obtain a 50% interest in the license area.

Contact Uchenna Izundu at uchennai@pennwell.com.

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