VANCOUVER, BC, March 21, 2022 /CNW/ - Canada Energy Partners Inc. (NEX: CE.H) (the"Company") today announced that it has negotiated and signed two separate Letters of Intent, one with a private oil company based in the UK and the second with a private, domestic oil producer based in Gabon, West Africa.
"These Letters of Intent are the first steps in pairing our technical expertise with local producers to acquire assets previously identified and owned by International Oil Companies in Gabon that have rationalized their portfolios," said Grant Hall, President of Canada Energy Partners. "It is our intent to build long and mutually beneficial relationships with oil industry professionals in Gabon that possess above average oil and gas assets."
The first Letter of Intent provides for the Company to acquire a 1.69% interest in a 166.7 KM2 prospective licensed property. Within the licensed property there are 7 identified assets, of which 4 are onshore and 3 offshore in shallow water. The second Letter of Intent provides for the Company to acquire a 38.31% interest in the largest of the 7 identified assets. Ultimately, the Company will acquire a total of 40% interest in the largest onshore asset.
The Letter of Intent with the domestic oil producer based in Gabon requires the Company to make cash payments in the aggregate amount of $2,500,000 US. The Company will commit to a capital expenditure program of $7,000,000 US to begin as soon as approvals and due diligence reviews have been ¬¬completed. The capital commitments will fund the drilling of two horizontal wells on the asset where a previously drilled well was successfully tested before being shut in.
The Letter of Intent with the UK company requires the Company to make a cash payment of $2,000,000 US and royalty payments to commence 6 months after commercial production begins of$4,000,000 over 4 years.
The favourable terms under the Profit-Sharing Agreement with the Government of Gabon covering the concessions under the Letters of Intent, combined with the current favorable oil prices is expected to allow the Company to recoup all of its advance payments and capital expenses on an expedited basis after commencement of production. The positive cash flow from these concessions can then be used to organically grow the Company's oil assets without the requirement for any further diluting financings.
The Company's rights under the Letters of Intent are in a concession comprising of 166.7 km2 total gross area and included de-risked exploitation opportunities in 4 onshore and 3 offshore shallow water fields.
• Country of 267,700 km² in Central Africa.
• Combination of offshore and onshore fields.
• Legal terms: Production Sharing Contract (PSC).
• Gabon is a mature oil province with First Oil in 1957.
• It contains mature infrastructure for production and export, providing tie back opportunities for small/medium size field.
• Peak oil at 220,000 bopd in 1997 with Rabi Giant.
• Gabonese government is encouraging new development to halt production declines. Current Daily production: between 180 – 200 kbopd.
On behalf of the Board of Directors of
Canada Energy Partners Inc.:
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words or statements that certain events or conditions "may" or "will" occur, including, without limitation, estimated revenues. Forward-looking statements in this press release include statements about the anticipated filing deadline for the Annual Filings. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, without limitation, the fluctuations in the market price for hydrocarbons, labour and materials, the ability to obtain capital under satisfactory terms, political and regulatory risks, the
resurgence of the COVID-19 Pandemic, etc. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The forward-looking statements contained in this press release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by law.
SOURCE Canada Energy Partners Inc.
View original content: http://www.newswire.ca/en/releases/archive/March2022/21/c6486.html
For further information: please contact: CANADA ENERGY PARTNERS INC., Attention: Grant Hall, President, Email: email@example.com, Direct Phone: (520) 668 4101
CO: Canada Energy Partners Inc.
CNW 07:00e 21-MAR-22