Canadian Overseas Petroleum Limited's 50% owned affiliate, Shoreline Canadian Overseas Petroleum, has completed the acquisition of 80% of the share capital of Essar Exploration and Production Limited.
Essar Nigeria's sole asset is a 100% interest and operatorship of OPL 226 located 50km offshore in the central area of the Niger Delta.
Under the terms of the production sharing contract governing OPL 226, Essar Nigeria is required to seek ministerial consent for the transaction.
Application has been made and the parties to the transaction are awaiting its approval.
Under the terms of the acquisition, ShoreCan will take over management and have a majority of directors on the Board of the Essar Nigeria immediately.
An extension to the first phase of the PSC to December 31, 2017 was recently granted to Essar Nigeria. The remaining commitment on the first phase of the PSC is the drilling of one well. COPL's technical team has identified a drilling location, which will be an offset to an oil discovery made in 2001 by a previous Contract holder.
OPL 226 has an area of 1530 sq km and is located approximately 50 km offshore the central delta region of Nigeria in water depths ranging from 40 to 180 meters.
It offers oil appraisal and development opportunities having near term oil production potential and significant exploration upside. Historically, five wells have been drilled, with the first oil discovery on the block made in 2001in the fifth well after earlier drilling intersected predominantly gas-bearing sands.
At 1:03pm: (LON:COPL) Canadian Overseas Petroleum Limited Com Shs Npv share price was +0.38p at 6.75p