Medco Energi has signed a Sale and Purchase Agreement (SPA) with Reliance Exploration & Production DMCC (REPDMCC) to acquire 25% participating interest in Block 9 (Malik) Republic of Yemen on July 5 2012, with effective economic date of January 1 2012.
Completion of the transaction is conditional upon approval from the Ministry of Oil and Minerals of Yemen. Upon the completion of the transaction, Medco Energi will effectively have 21.25% participating interest (after taking into account a proportionate carried share of Yemen Oil and Gas Company (YOGC)). The resulting participating interests in the Block 9 (Malik) PSA will be as follows: Calvalley Petroleum (Cyprus) 42.50% (Operator); Medco Yemen Malik 21.25%; Hood Oil 21.25%; YOGC 15.00%.
Block 9 is located in the province of Hadramaut, Yemen, about 350 kms NE of the Yemeni capital, Sana'a. The Block, which is located within the Sayun-Masila Basin, has an area of 2,234 sq kms, in which some of its area has previously been explored. On Aug 25 2005, the Government of Yemen granted the construction licence for the Block for a 20 year period. Participating licence holders have the right to negotiate for an extension of another 5 years after 2005.
The estimated gross 2P reserves of Block 9 are approx. 58.6 mmbo (as of Jan 1 2012) and is envisaged to produce up to approx. 14.5 mbopd. Discoveries in Block 9 include four oil fields.