Equator Exploration Limited announces a farm out of part of its Participating Interest in the Production Sharing Contract (‘PSC’) in Oil Prospecting License (‘OPL’) 323, offshore Nigeria.
The Company has entered into an agreement with BG Exploration and Production Nigeria Limited (‘BG’) to assign from its thirty per cent (30%) Participating Interest in the Production Sharing Contract for OPL 323, a twenty percent (20%) participating Interest to BG, in exchange for a total consideration of US$75 million, comprises both cash and carry on future expenditure. The completion of the farm out is subject to receipt of all necessary consents and approvals, including the approval of the Nigerian National Petroleum Corporation (‘NNPC’).
Equator has also agreed with its Nigerian partners to buy back 3% of the Net Profits Interest granted in March 2006 on completion of the farm out referred to above. After taking account of these transactions Equator will have a net economic interest, after recovery of costs, of 9% in OPL 323.
Wade Cherwayko, Chief Executive Officer of Equator commented, ‘We are delighted to have secured this farm-out with BG. BG’s adjacent and surrounding acreage and activities complement those of Equator and make BG an excellent partner. We will continue to work closely with the Korea National Oil Corporation (‘KNOC’), the operator and with our other partners in the OPL 323 block; to which BG is a very welcome addition’.