Rocksource reduces in Guinea BissauPublished 08.06.2011 12:06:55...

Rocksource reduces in Guinea Bissau
Published 08.06.2011 12:06:55 by John Bradbury
Norway based Rocksource has cut its exposure to exploration expense offshore West Africa in a three-way deal with Noble Energy and Ophir.

Under a newly announced farm-down agreement Rocksource is cuttings its equity in the AGC Profond Production Sharing Contract area offshore Senegal and Guinea Bissau, and is in line to receive up to US $34 million for past exploration expenditure and future drilling costs.

Noble Energy has agreed to take up to 30% equity in the 9,838 square kilometre AGC Profond licence area in exchange for a $28 million payment, plus a further $6 million if Rocksource and Noble decide to drill a second exploration well after the forthcoming Kora 1 well.

Kora 1 is due to spud shortly, targeting an estimated reserves base of 450 million barrels of oil.

A further $20 million is payable by Noble to Rocksource in the event of a discovery and further appraisal drilling.

Noble is also becoming the technical operator of the block, and will become the full block operator taking over from Ophir when an appraisal programme is approved.

Rocksource chief executive Trygve Pedersen said the deal demonstrates the quality of the acreage in the PSC. � Rocksource will reduce drilling costs for 2011 and materially strengthen our cash position. We retain a potential 12.5 per cent position in the PSC, which we believe has a total un-risked resource potential of approximately 1.7 billion barrels of oil equivalent,� he pointed out.

�In addition to the short-term proceeds, Noble's future contribution towards exploration/appraisal activities enables Rocksource to participate in a success case in a very capital efficient manner.�