Decklar Closes Purchasing of Westfield Exploration and Production Limited

Source: 6/6/2022, Location: Africa

Decklar Resources Inc. is pleased to announce the closing of its previously announced transaction to purchase all of the issued and outstanding ordinary shares of Westfield Exploration and Production Limited (“Westfield”), a Nigerian entity that has entered into a Risk Finance and Technical Services Agreement (“RFTSA”) with Erebiina Energy Resources Limited (“Erebiina”) to participate in the Emohua Field in Nigeria, located in OML 22, which is 6 km west of Port Harcourt.

The Emohua Field
The Emohua Field was awarded to Erebiina (60%) and the balance (40%) to other local Nigerian entities in the 2020/2021 Marginal Field Bid Round and is situated onshore on dry land terrain in the southeastern section of OML 22 in the Eastern Niger Delta area. The Emohua Field is situated approximately 6 km west of the city of Port Harcourt in Rivers State and approximately 30 km west of the Oza Field, which Decklar is currently developing. The Bonny Oil Export Terminal and Bonny LNG plant are located approximately 50 km south of the Emohua Field.

The Emohua Field was formerly operated by Shell Petroleum Development Company of Nigeria Limited (“SPDC”). It was awarded to Erebiina by the Federal Government of Nigeria in 2021 as part of the Marginal Field Program.

One well (Emohua-1) was drilled by SPDC in 1979 to a depth of 11,050 ft and encountered oil and gas in several stacked reservoirs. The well was suspended by SPDC as an oil and gas discovery. Data available includes 3-D seismic acquired in 2000/2001 and wireline log data. Petrophysical analysis showed the presence of nine hydrocarbon bearing zones ranging from 20 ft to 70 ft thick. Seismic interpretation also shows upside potential in the deeper undrilled/untested zones where potential closures exist.

The initial planned stages for development of the Emohua Field include re-entering the existing Emohua-1 well, installation of production and export facilities, and construction of flowlines. The Emohua Field can potentially be placed on production directly after the re-entry of the Emohua-1 well due to existing oil and gas export pipelines being located within 5 km of the well.

The full field development plan will include the drilling and completion of up to nine additional wells and expansion of the processing facilities to enable handling and processing of up to 30,000 barrels of crude per day for the expected peak production levels.

Purchase of Westfield by Decklar
Decklar and Westfield previously entered into a share purchase agreement (the “SPA”) whereby Decklar has purchased all of the issued and outstanding ordinary shares of Westfield (the “Westfield Shares”). Westfield has separately entered into an RFTSA with Erebiina in respect of the 60% equity interest that was awarded to Erebiina for the Emohua Field. Further, Decklar is aware that Westfield is seeking to enter separate RFTSAs with one or more parties in relation to the remaining 40% interest in the Emohua Field.

The SPA terms included a cash payment of US$7 million, which was previously paid as a deposit to be credited against the final purchase price, and the issuance of 6,000,000 common shares of Decklar (“Decklar Shares”) as consideration for the acquisition of all the issued and outstanding Westfield Shares. In the event Westfield enters into additional RFTSAs in respect of the remaining 40% interest, up to an additional 2,500,000 Decklar Shares will be issued to the shareholders of Westfield.

Duncan Blount, CEO of Decklar Resources, remarked “Closing the acquisition of Westfield now brings a third asset to our portfolio at Decklar. Similar to the Oza and Asaramatoru fields, the Emohua Field is a proven undeveloped conventional oilfield with potential for near-term re-entry and re-completion activities, followed by subsequent full field development. We look forward to further incorporating the asset into our company and progressing development towards near-term oil production potential. This is an attractive asset, and one that compliments the rest of our portfolio with a similar infrastructure advantage.”

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