Sterling Energy increases its stake to 25 per cent onshore Somaliland block

oilfield somaliland-danisimmonds sxc.huThe company took over 15 per cent of Jacka Resources Somaliland Limited’s stake in the PSC after a farm-out agreement. (Image source: Dani Simmonds/sxc.hu)Independent oil and gas firm Sterling Energy has increased its stake to 25 per cent in a production sharing contract (PSC) for the Odewayne Block in Somaliland

The company took over 15 per cent of Jacka Resources Somaliland Limited’s stake in the PSC after a farm-out agreement.

The current stakeholders are Genel Energy Somaliland Limited with 50 per cent holding, Sterling Energy (East Africa) Limited with 25 per cent share, Petrosoma Limited with 10 per cent interest and Jacka Resources Somaliland Limited has the remaining 15 per cent stake.

Alastair Beardsall, chairman of Sterling Energy, said, “We are very pleased to have entered into the farmout agreement with Jacka Resources for the Odewayne Block in Somaliland. By purchasing an additional 15 per cent carried interest we will have built a material stake of 25 per cent in the PSC. We consider the Odewayne Block to be highly prospective and look forward to working with our joint venture partners in the exploration of this largely unexplored block.”

The PSC reportedly covers Block SL6 and part of Blocks SL7 and SL10 onshore Somaliland, comprising an area of 22,840 sq km.

Awarded in 2005, the contract is in the third period (expiring November 2014) with an outstanding minimum work obligation of 500 km of 2D seismic, the UK based company news. The minimum work obligation during the fourth period of the PSC (expiring May 2016) is for 1,000 km of 2D seismic and one exploration well, it added.

Meanwhile, under the terms of the farm-out agreement with Jacka Resources Somaliland Limited, Sterling Energy will pay the former US$3mn, with future conditional payments of US$12mn based on various operational milestones being met. However, completion of the transaction with Jacka Resources Somaliland Limited remains subject to approval by the government of Somaliland, Sterling Energy said.

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