Sterling Energy East Africa has entered into an agreement with Petrosoma to acquire 10% of the production sharing contract (PSC) in the Odewayne block in onshore Somaliland.
PSC’s current holders include Genel Energy Somaliland with a 50% stake, Petrosoma with 20% and Jacka Resources Somaliland with a 30% stake.
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Sterling will pay $2m with future conditional payments of $8m based on various operational milestones being met.
Sterling will be carried by Genel for the costs of all exploration activities during the third period of the PSC which expires in November 2014 with an outstanding minimum work obligation of 500km of 2D seismic. The company will also be carried by Genel during the fourth period of the PSC expiring in May 2016, with a minimum work obligation of 1,000km of 2D seismic as well as one exploration well.
Awarded in 2005, the PSC is in the third period and covers block SL6 and part of blocks SL7 and SL10, onshore Somaliland, comprising an area of 22,840km².
An aeromagnetic and gravity survey conducted this year confirmed the geometry of a broad basin over the Odewayne block.
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By GlobalDataA 2D seismic programme will be acquired in 2014 as part of the forward work programme in order to define drillable targets.
Sterling Energy chairman Alastair Beardsall said: "We consider the Odewayne block to be highly prospective and look forward to working with our joint venture partners in the exploration of this largely unexplored block."
