CALGARY, June 17, 2013 /CNW/ - Caracal Energy Inc. ("Caracal Energy" or the "Company") today announced that it completed a previously disclosed Farm-in Agreement (the "Agreement") with GlencoreXstrata plc ("Glencore") for the 25% farm-in for the development of the Badila and Mangara oil fields in Chad.
Under the terms of the Agreement, Glencore will earn a 25% working interest in the Badila and Mangara Exclusive Exploitation Authorizations (the "EXAs") with Caracal Energy retaining a 50% working interest. Under the terms of a separate agreement between Glencore and Société des Hydrocarbures du Tchad ("SHT"), Glencore has acquired a further 10% working interest in the EXAs, with SHT retaining the remaining 15% working interest.
Glencore, in consideration for acquiring the working interest in Badila and Mangara from Caracal, will fund US$300 million of Caracal Energy's working interest share of joint venture expenditures in the Badila and Mangara oil fields up to a maximum of US$100 million per year (the "Carried Amount"). The effective date of the Agreement is July 1, 2012. Under the terms of the EXAs, Caracal Energy and Glencore are required to fund SHT's costs, which are reimbursed through cost oil.
Pursuant to the Agreement, Glencore acquired a 33.3% working interest in the Exclusive Exploration Authorizations (the EEA's) granted under each of Caracal Energy's three production sharing contracts in the Republic of Chad (the "PSCs"). In consideration for the assignment of the working interest, Glencore paid to Caracal Energy approximately US$31 million on closing, representing 33.3% of the Company's unrecoverable costs related to the three PSCs as of July 1, 2012.
The three PSCs cover an area of 26,103 km2 in southern Chad. The Badila and Mangara oil fields have a combined size of approximately 100 km2 and are located within 95 kilometres of each other within the same PSC. The Badila oil field covers an area of approximately 29 km2 and is located approximately 16 kilometres from an oil export pipeline. The Mangara oil field covers an area of approximately 71 km2 and is located approximately 111 kilometres from the same oil export pipeline.
Gary Guidry, Caracal's Chief Executive Officer, said:
"This transaction with Glencore is a very important step in the development of the assets in Chad. We have been working with Glencore on this transaction since July 2012 and we look forward to continuing the partnership as we drive the project towards first oil production within the next few weeks."
Alex Beard, Head of Glencore's Oil Commodity Department, said:
"The closing of this transaction represents an important milestone in the continued growth of our E&P business. In Chad, we have invested in a portfolio of development and near term production assets with some exciting exploration prospects and look forward to first oil production in the near future."
About Caracal Energy Inc.
Caracal Energy Inc. is an international exploration and development Company focused on oil and gas exploration, development and production activities in the Republic of Chad, Africa. In 2011, the Company entered into three PSCs with the government of the Republic of Chad. The PSCs provide exclusive rights to explore and develop reserves and resources over a combined area of 26,103 km2 in southern Chad. The PSCs cover two world-class oil basins with development opportunity, oil discoveries, and numerous exploration prospects.
FORWARD LOOKING STATEMENTS
Certain of the information contained in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", "seeks" and similar expressions. Specific forward-looking statements included in this press release include comments related to the development of the Badila and Mangara fields and associated timing, expected drilling results, expected testing results, expected production rates and other matters.
SOURCE: Griffiths Energy International Inc.
For further information:
Caracal Energy Inc.
Gary Guidry, President and Chief Executive Officer
Trevor Peters, Chief Financial Officer
Longview Communications - Canadian Media Enquiries
FTI Consulting - UK Media Enquiries
Ben Brewerton / Ed Westropp
+ 44 (0) 207 8313 3113