Somalia: Wildcat drilling possible by mid-2011

Amended production sharing agreements for the Dharoor Valley and Nugaal Valley exploration areas could lead to drilling by mid-2011, said Africa Oil Corp., Vancouver, BC.

By OGJ editors
HOUSTON, Jan. 17
– Amended production sharing agreements for the Dharoor Valley and Nugaal Valley exploration areas could lead to drilling by mid-2011, said Africa Oil Corp., Vancouver, BC.

The Puntland Petroleum & Mineral Agency extended the PSAs for a further 12 months to Jan. 17, 2012. Africa Oil, Range Resources Ltd., and Lion Energy Corp. hold the PSAs.

The amended PSAs obligate Africa Oil to spud at least one exploratory well in the Dharoor Valley Exploration Area by July 27, 2011. A second exploratory well is required to be spudded in either area at Africa Oil’s option by Sept. 27, 2011. Africa Oil said it is in advanced talks with a drilling contractor.

The government has approved farmout to Red Emperor Resources NL of a 20% interest in the PSAs. Red Emperor is committed to pay a disproportionate share of the costs related to Africa Oil’s drilling commitments in the first exploration period.

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