UK-based oil and gas company Ophir has signed an agreement with Kosmos Energy to provide an exploration license and sell 40% non-operated stake in EG-24 exploration license in Equatorial Guinea.
As per the terms of the farm-out deal, Kosmos will pay the cost of a block-wide 3D seismic survey during the first exploration period under the license. Financial terms of the deal were undisclosed.
Moreover, Kosmos will carry Ophir for the cost of a well if the companies decide to drill one in the license’s second phase.
Ophir CEO Nick Cooper said: “Kosmos is a logical partner for us in EG-24 as its team has considerable prior experience of the Rio Muni Basin.
“Kosmos now operates the adjacent exploration blocks (W, S & EG-21), as well as retains a 50% interest in Kosmos-Trident Equatorial Guinea, which operates the neighboring Ceiba and Okume oil fields, which are up-dip from Block EG-24 and can offer infrastructure tie-backs if required.
“The farm-out reduces Ophir’s risk capital commitment and increases our monetization options in line with our disciplined exploration strategy.”
Shearwater will be responsible for the seismic operations, which will be conducted using the Polar Marquis vessel. The agreement is due to secure approval by the Equatorial Guinea government.
The Block EG-24, which is one of 20 exploration areas considered for during the EG Ronda 2016 licensing round, is located to the west of producing fields Ceiba and Okume.
Ophir Energy currently operated the block with 80% stake while GEPetrol will have 20% interest. GEPetrol, however, has option to increase its stake by another 10% if a commercial discovery is made.
Earlier this month, Ophir agreed to purchase South East Asian assets from Australian oil and gas company Santos for $205m.
The deal includes material-producing assets in Vietnam and Indonesia as well as exploration and appraisal assets in Vietnam, Bangladesh and Malaysia.
Ophir said that the acquisition is in line with its strategy to rebalance its production and exploration portfolio.