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Egyptian Farm-Out and Interest Assignment

Source: www.oilegypt.com 8/4/2006, Location: Africa

Aminex PLC announces two separate transactions in connection with its Block 2, West Esh El Mellaha (“WEEM”) concession in the Eastern Desert of Egypt:

(1) Aminex Petroleum Egypt Ltd. (“APEL”) has concluded a farm-out of a 20% interest in WEEM to Groundstar Resources Ltd. (“Groundstar”) of Calgary. Groundstar has committed to fund 40% of the financial obligations under the WEEM Production Sharing Agreement up to a ceiling of $9 million ($3.6 million net to Groundstar) in order to earn a 20% working interest. In addition to Aminex, shareholders in APEL are First Energy Pty Ltd. (“First Energy”), PetroSino Ltd and FS International Corporation.

(2) Under separate arrangements involving the original shareholders of APEL (formerly known as Red Sea Petroleum Ltd.), First Energy has been acquired jointly by Volant Petroleum Ltd., an Australian public company and by Karl Thomson Group of Hong Kong. As part of these arrangements Aminex will reduce its beneficial shareholding in APEL to 12.5%. Aminex’s 12.5% share of the exploration costs for APEL’s 80% interest in WEEM will now be carried through to first commercial production, free of any financial commitment. This equates to a carried interest of 10% in the WEEM concession.

The WEEM Production Sharing Agreement calls for three exploration wells to be drilled in the initial three year period. The concession has been formally approved by President Mubarak of Egypt and the initial period will commence as soon as formal signing has been completed with the Egyptian Minister of Energy, expected to be in the near future.

The WEEM licence covers 1,328 sq. kilometres and lies in the southern portion of the well-established Gulf of Suez petroleum basin. Five producing fields are located on the adjacent block to the south-east, operated by Lukoil Overseas and currently producing approximately 12,000 barrels per day in aggregate. Oil and gas pipelines with surplus capacity are situated close to WEEM.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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