Roc Oil (Cabinda) Company, a wholly owned subsidiary of ROC, has executed a farmout agreement with Pluspetrol Angola Corporation ("Pluspetrol"), a wholly owned subsidiary of Pluspetrol Resources Corporation, for the farmout of a 45% interest (56.25% paying interest) in the Cabinda Onshore South Block, Angola. Pluspetrol will also become operator of the block.
ROC will retain a 15% interest (18.75% paying interest) in the block through its wholly owned subsidiary, Lacula Oil Company Limited, which will be free-carried through the full 2009 work programme and budget, planned to include the testing of the Coco discovery.
ROC will also be reimbursed for its share of the joint venture's working capital effective 31 December 2008, including its share of drilling inventory to be used during the 2009 drilling programme. Completion of the agreement is subject to government and joint venture approvals.
Commenting on the agreement, ROC's Chief Executive Officer, Bruce Clement, stated:
"ROC is pleased to announce the introduction of a new partner, Pluspetrol, into the Cabinda Onshore South Block joint venture. Pluspetrol will bring new ideas and investment to the joint venture.
The farmout also achieves an important part of ROC's business strategy, which is to reduce risk in the company's asset portfolio and to minimise 2009 exploration expenditure. While reducing ROC's equity in the block to 15%, the company will continue to be exposed to the potential upside at no cost in 2009. In the meantime, ROC will be able to focus its capital resources on development projects in China and Australia."
