roc to increase its interests in the chinguetti, b

ROC TO INCREASE ITS INTERESTS IN THE CHINGUETTI, BANDA
AND TIOF DISCOVERIES, OFFSHORE MAURITANIA
KEY POINTS
• Effective 1 August 2003, Agip Mauritania B.V. (“Agip”) has decided to sell its 35% interest in
Production Sharing Contracts ("PSC") Areas A and B, offshore Mauritania to the other four
participants, including ROC. The proposed sale will be via a two step process which will
initially see the operator, Woodside Petroleum Limited, temporarily acquire all of Agip's equity
before distributing the relevant equity parcels to the other co-venturers on a pro-rated, same
cost, basis.
• As a result, ROC's interest in PSC Area A, which contains the Banda Oil and Gas discovery,
will increase from 2.7% to 4.155% and its interest in PSC Area B, which contains the
Chinguetti and Tiof oilfields, will increase from 2.4% to 3.693%.
• ROC's total net share of the cost of the transaction will approximate US$3.6 million/A$4.8
million including adjustments for costs incurred subsequent to the 1 August 2003 effective
date. The purchase will be funded from the Company's cash assets. Modest additional
contingent payments, up to a total of US$0.6 million net to ROC, may be made subject to
certain exploration, development and production success milestones being achieved.
1. BACKGROUND
Woodside Petroleum Limited (“Woodside”) has advised that:
− It will increase its interest in two of its core Mauritanian exploration areas following the
signing of an agreement to acquire Agip Mauritania B.V. (“Agip”), a wholly owned
subsidiary of the Italian oil and gas company, ENI Exploration B.V.
− Agip currently holds a 35% interest in each of PSC Area A, which contains the Banda
discovery, and PSC Area B, which contains the Chinguetti and Tiof discoveries.
− As a result of the transaction, Woodside will initially and temporarily, acquire 100% of the
shares in Agip Mauritania B.V. for about US$62 million, plus adjustments from an effective
date of 1 August 2003. In addition, a contingent payment of up to US$15 million may be
paid on completion of certain exploration, development and production success
milestones.
Roc Oil Company Limited (ABN 32 075 965 856)
Level 16, 100 William Street, Sydney NSW 2011, Australia. Telephone: +61 2 8356 2000 Facsimile: +61 2 9380 2066
2. THE ON-SALE TRANSACTION
In a related transaction, Woodside has agreed to on-sell, on the same cost basis, to the
remaining joint venturers in the PSC areas, their pro rata share of the equity being acquired
from ENI.
The acquisition and on-selling transactions are expected to close early in 2004.
Following the Agip acquisition and the pro rata allocation of interests among all of the
continuing joint venturers, interests in PSC Areas A and B will be:
Company PSC A PSC B
Pre-sale
%
Post-sale
%
Pre-sale
%
Post-sale
%
Woodside 35 53.846 35 53.846
Agip Mauritania BV 35 – 35 –
Hardman 24.3 37.384 21.6 33.23
Fusion Mauritania A 3 4.615 – –
Fusion Mauritania B – – 6 9.231
ROC Oil 2.7 4.155 2.4 3.693
3. ROC CEO’S COMMENTS
Commenting on the transaction, ROC’s Chief Executive Officer, Dr John Doran, stated that:
"The transaction’s US$3.6 million/A$4.8 million net cost to ROC will be funded from the
Company cash assets.
The move is the latest example of ROC consolidating its position in its core areas. It is
consistent with ROC’s 2 December 2003 ASX announcement that the Company had secured
an option to increase its equity in Block 7 offshore Mauritania from 2.0% to 5.5%.
Ideally, ROC would like to be at about 5% in all of its deep water blocks offshore Mauritania
and we are prepared to be patient with regard to how we get there because we see our
involvement in this emerging petroleum province as a long term core project, as foreshadowed
in ROC's Release to ASX dated 31 October 2002.
Agip has been a terrific participant and their contributions to the Joint Venture will be missed.
However, we well understand that definitions of core area vary markedly between companies
like Agip and companies like ROC.”