African Petroleum signed a non-binding term sheet agreement with a private London-based independent oil and gas company to farm-in to African Petroleum’s 100% owned Liberian LB-08 license.
LB-08 is situated in a highly prospective region offshore Liberia.
According to the agreement, the London-based company will acquire a 50% net participating interest in the LB-08 license in return for the payment of 50% of all future costs and expenditures relating to the LB-08 license and a contribution to past costs and expenditures.
In an independent review of African Petroleum's acreage conducted by ERC Equipoise in April 2014, the estimated net unrisked mean prospective oil resources of LB-08 exceeds 2 billion bbl. With an oil discovery in the adjacent license and proof of a working hydrocarbon system in the central Liberian basin, African Petroleum believes that LB-08 has substantial potential.
Completion of the farm-in transaction is subject to contract and a number of conditions precedent, which, apart from one pertaining to approval from the Liberian Government, must be satisfied or waived no later than 29 January 2015.
“Should the farm-in transaction complete, the incoming third party will bring a breadth of knowledge and experience to the partnership and will allow the Company to continue its exploration program in its highly prospective acreage in Liberia benefiting from the falling operating costs brought on by a lower oil price,” says Dr. Stuart Lake, African Petroleum CEO. “African Petroleum Corporation continues its negotiations with potential partners in its other licenses and remains confident that it will secure additional farm-outs in due course.”