Somaliland: Genel to farm in to Odweine Block and assume operatorship

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Genel Executives met president Silanyo to finalize exploration arrangements worth $40MSomalilandsun- Genel Energy announces that it has agreed to farm in for 50 per cent of Jacka Resources Limited’s (“Jacka”) licence interests to explore for and produce oil and gas in the Odewayne Block, Somaliland (“Odweine”) (the “Transaction”). As part of the Transaction, Genel Energy will assume operatorship.

Under the Transaction, Genel Energy will acquire 50 per cent of Jacka’s participating interest in the Odewayne Production Sharing Agreement (“PSA”). Jacka will retain a 30 per cent interest and the remaining 20 per cent interest is held by Petrosoma.

The consideration comprises an initial payment of $0.67 million to Jacka in recognition of past costs plus a 100 per cent carry of Jacka and Petrosoma for the exploration work programme required under phases III and IV of the PSA. This programme includes a minimum of 1,500 kms 2D seismic and the drilling of one exploration well. These will be funded from the Company’s existing cash resources.

The Odewayne Block covers block SL6 and part of blocks SL7 and SL10, onshore Somaliland. It comprises an area of 22,000 square kilometres enclosing a Jurassic/Cretaceous rift basin. An active petroleum system has been demonstrated by numerous oil seeps on the block confirming that the area is underpinned by a working hydrocarbon system, which is believed to be analogous to the nearby producing basins in Yemen. A recently commenced airborne gravity and magnetic survey will be used to design an extensive 2D seismic acquisition programme to be initiated in Q1 2013.

The Transaction is conditional on the receipt of approval from the Government of Somaliland.

Commenting on the transaction, Dr. John Hurst Chief Operating Officer of Africa for Genel, said:

“We are delighted to have farmed in to the Odewayne Block, substantially increasing our acreage position in Somaliland. This block, together with our SL10/13B acreage, means we have built a strong position in an exciting frontier exploration area. Such frontier exploration opportunities, with a very realistic possibility of finding large volumes of hydrocarbons, are increasingly rare. We look forward to commencing our exploration programme which will lead to spudding of our first well by mid-2014.”

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Genel Energy is an independent oil and gas exploration and production company listed on the main market of the London Stock Exchange (LSE: GENL). The company, with headquarters in London and additional offices in Ankara and Erbil, is the largest independent oil producer and the largest holder of reserves in the Kurdistan Region of Iraq and, through value-accretive acquisitions, is building a high impact exploration portfolio within the Middle East and Africa. For further information, please refer to www.genelenergy.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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