Monday, August 08, 2011
Chariot O&G Ltd.
Chariot announced that its wholly-owned subsidiary, Enigma Oil & Gas Exploration (Pty) Limited, has entered into a farm-out agreement with BP, whereby BP will acquire a 50% share of Chariot's equity interest in Southern Block 2714A (License 20). As announced on June 28, 2011, Petrobras has elected to take up operatorship and retains a 50% stake in the block.
Under the terms of the agreement, BP has committed to cover Chariot's cost of drilling the first exploration well, as well as past costs incurred.
Block 2714A is located in the Orange Basin offshore Namibia and covers an area of 5,481km². The Nimrod prospect is situated within this license and is the largest of Chariot's prospects. With this farm-out, Chariot will continue to pursue its drilling campaign within this license area whilst sharing in the costs, risks and rewards of exploration. Funds received and retained through this deal will be used in further exploration and appraisal work.
This agreement remains subject to the full approval of the Ministry of Mines and Energy in Namibia. It includes standard representations and warranties given by both parties and other conditions precedent.
Paul Welch, Chief Executive of Chariot, said, "We are delighted to enter into this farm-out agreement with BP whose global expertise of deep water exploration and related petroleum systems is exceptional and whose contribution to our campaign going forward will be invaluable. It is a pleasure to welcome another major oil company as a partner.
"It has been a key strategic objective for us to farm down our assets in order to facilitate exploration drilling, retain capital and mitigate risk; we are very pleased to have made progress towards this. We look forward to proving up the potential of our assets alongside our partners, as we seek to deliver long-term value to our shareholder."
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