African Petroleum Corporation Limited ("African Petroleum"
or the “Company”) provides the following corporate update
covering its licence interests in The Gambia and Senegal,
West Africa:
Highlights
- Exclusivity Agreement allowed to lapse to enable the
Company to engage with other interested parties for the SOSP
licence in Senegal and to provide flexibility in government
discussions regarding the A1 and A4 licences in The Gambia
- Ongoing discussions with Gambian officials to agree a
forward plan for A1 and A4 licences, including meeting with
President Barrow on 13 July 2017
- The Board of African Petroleum reiterates and maintains
its legal position on the A1 and A4 licences in The Gambia,
and reiterates its willingness to utilise dispute resolution
mechanism provisions if the outcome is unfavourable for the
Company
- The Company expects formal feedback from the Gambian
government in early August 2017
- The Company is confident that the Senegalese authorities
will approve the Company’s proposal to extend the SOSP
licence, subject to farming out to a suitable partner
Heads of Terms Agreement
Further to the announcement on 7 June 2017 regarding an
extension to the previously announced Exclusivity Agreement
covering the SOSP licence in Senegal, and the A1 and A4
licences in The Gambia, the Company announces that the
parties have mutually agreed to not extend the Exclusivity
Agreement which expired today.
Due to recent developments whereby the Senegalese
authorities have expressed a willingness to proceed with the
SOSP licence extension upon the Company securing a farm-out,
and the delays being experienced in The Gambia, the
Exclusivity Agreement (which regarded both countries as one
transaction) was viewed as too restrictive, as the Company
could not secure the SOSP licence extension without first
resolving the situation in The Gambia.
Accordingly, the Company considered it to be in the best
interests of the Company to allow the Exclusivity Agreement
to lapse, thereby enabling the Company to enter into
discussions with other interested parties in its SOSP
Licence in Senegal whilst it seeks to resolve the situation
in The Gambia.
The Gambia
Since the announcements in early July 2017 regarding its A1
and A4 licences in The Gambia, the Company has been engaged
in dialogue with Gambian officials with a view to
identifying a solution that is in the best interest of all
stakeholders. The Company confirms that a local
representative for the Company met with the Minister for
Petroleum and Energy and Permanent Secretary on 6 July 2017,
and a delegation from African Petroleum, including the CEO
and CFO, travelled to The Gambia for a meeting with
President Barrow in Banjul on 13 July 2017.
Further to the meeting with the President and subsequent
dialogue, it is the understanding of the management team
that the government is considering the Company’s proposal
regarding the licences and it is anticipated that the
Company will receive formal feedback and clarity on the
situation from the government in early August 2017.
The Company has reiterated its firm position over its legal
rights to the A1 and A4 licences in The Gambia and has
communicated to the government that it will utilise the
dispute resolution mechanism provisions of the licences
should the outcome of the government’s decision not be
favourable to the Company.
In the meantime, the Company has been approached by other
industry players that are interested to join the Company in
the A1 and A4 licences when the situation with the Gambian
government is resolved.
Senegal
The Senegalese authorities are currently considering the
Company’s proposal to extend the SOSP licence for a period
of 18-24 months in order to allow additional time to acquire
3D seismic and to drill an exploration well on the block.
Any such extension is conditional on African Petroleum
bringing in a suitable partner on the licence and to this
end, the management team will commence discussions with a
number of companies who had expressed interest in farming
into SOSP but were restricted from entering into commercial
negotiations as a result of the Exclusivity Agreement that
had been in place since mid-April 2017.
The SOSP licence continues to generate industry interest and
the Company hopes to finalise a standalone farm-out
transaction on the SOSP licence shortly in order to enable
the licence extension to be granted.
African Petroleum continues to reserve its rights on the ROP
licence while it negotiates the SOSP extension.
Commenting on the update, African Petroleum’s CEO Jens Pace
said:
"After much consideration, we have decided to allow the
Exclusivity Agreement to lapse as we now have more
flexibility to engage in standalone commercial discussions
on our SOSP licence in Senegal whilst we seek to resolve the
uncertainty over our position in The Gambia.
We have continued to engage with the relevant authorities in
The Gambia and had an audience with the President who is
well informed of the situation and understands the measures
that we will take should we not receive a positive outcome
next month. I think the fact that we were granted an
audience with the President highlights that the significant
investment made by the Company in these licences is
recognised by the Gambian government and we hope that sense
will prevail in finding a way forward.
Our near-term focus will be on seeking a positive resolution
on our position in The Gambia whilst concurrently
formalising an agreement for SOSP licence. We know that
there are a number of interested parties who we expect to
engage with in the coming days now that we are no longer
bound by an exclusivity agreement."
For further information, please contact:
Jens Pace, Chief Executive Officer
Stephen West, Chief Financial Officer
Tel: +44 20 3655 7810
Angeline Hicks, Company Secretary
Tel: + 61 401 489 883
Media Contacts:
Buchanan
Ben Romney/Chris Judd
Tel: +44 207 466 5000
About African Petroleum
African Petroleum is an independent oil and gas exploration
company with an equity interest in eight licences in four
countries offshore West Africa (Senegal, The Gambia, Côte
d’Ivoire and Sierra Leone). The Company’s assets are located
in proven hydrocarbon basins in the West African Transform
Margin and the Atlantic Margin, where several discoveries
have been made in recent years.
For more information about African Petroleum, please see
www.africanpetroleum.com.au
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