Dana Petroleum, the Aberdeen-based oil and gas operator, said yesterday it had agreed a deal to acquire a 23% working interest in a huge concession offshore Guinea, in west Africa.
The company said it would acquire the interest from Texas-based Hyperdynamics and that the concession encompassed all of offshore Guinea, an area equivalent to 330 UK blocks.
Dana added that it had signed a letter of intent with definitive binding documents to be completed no later than December 31. It said Hyperdynamics intended to bring into the concession a further significant partner with strong financial and technical capability.
The Aberdeen group said it had the option to negotiate for an additional interest of up to a further 27% (to give it 50% in total) if Hyperdynamics did not sign a letter of intent with another company by the end of next month.
It also said Hyperdynamics’ agreement with the government of Guinea required it to relinquish 64% of the current acreage by the end of the year and review its production-sharing contract by the end of March.
Dana said Hyperdynamics had already acquired significant coverage of 2D seismic data in the acreage and would embark on a new 2D survey before the end of this month at an estimated cost of more than £6million. Seismic would be used to evaluate which parts of the concession to relinquish as mutually agreed by Dana and Hyperdynamics, it added.
Following the relinquishment, the acreage will still cover the equivalent of 119 UK blocks.
Dana will pay Hyperdynamics half the cost of the new seismic data acquisition plus £9.3million, in either cash or shares (at Dana’s election), on signature of a revised production-sharing contract.
Dana chief executive Tom Cross said: “Signature of this letter of intent is an important step for Dana in seeking to expand its exploration portfolio in west Africa.
“Following the discoveries at Jubilee, in Ghana and more recently at Venus, in Sierra Leone, this is currently one of the most exciting exploration regions globally.”