Arakis news announcement:
Reuters News Story:
Arakis (NASDAQ:AKSEF) says interest in joint venture high
CALGARY, June 20 (Reuter) - Arakis Energy Corp, which is
developing a 12.2-million-acre oil concession in Sudan, has
garnered interest from 18 international oil companies in its
quest to bring in a joint venture partner for the project,
company chief executive John McLeod said on Thursday.
"We've signed 18 confidentiality and non-competition
agreements with various companies and groups. These are the
players that we think should be and are interested in Sudan,"
McLeod said at Arakis's annual meeting.
He declined to name the companies that have or plan to
scour Arakis's confidental operating data, but said interest
has been shown from firms in Canada, Europe and Asia.
The company has attempted to strike a conventional joint
venture agreement since last autumn when a highly publicized
C$750-million deal to finance a pipeline to the Red Sea from
the company's oilfields in the southern part of the country
collapsed.
The end of the proposed deal caused a meltdown in the
company's share price, sparked investor lawsuits and forced a
complete change in Arakis's management.
McLeod said he is comfortable with recent analyst estimates
that current proven and probable reserves on the company's
concession total 600 million barrels of oil.
But he stressed that the company will not book the higher
reserves until an engineering report is completed.
Arakis's proved and probable reserves at the end of 1995
were booked as 314.4 million barrels.
Since the end of the 1995, however, Arakis drilled two
successful multi-zone wells on lands between its Heglig and
Unity fields.
Arakis's El Toor well tested at 4,500 barrels per day and
company officials said on Thursday that engineers estimate 72
million barrels could be recovered from the surrounding field.
Most recently, its Toma South well flow tested at 850
barrels per day from one zone and 650 each from two others.
That field was estimated to harbor 130 million recoverable
barrels, the company said.
McLeod said the recent drilling success has moved the
company's projected startup output from the project to 150,000
barrels per day from the previous 85,000 barrel per day
estimate.
The expected production boost has served to increase the
company's planned pipeline capacity by adding pumping stations
to construction plans.
McLeod said the entire cost for exploration, development
and pipeline construction is now pegged at US$930 million to be
spent over a 30 months.
Company vice-president David Harrison said Arakis has
raised a total of US$70 million to fund exploration expending
for 1996 and the company has expressions of interest from
institutional and private investors for a further US$42
million.
The investors for the additional financing, most of whom
are based in the United Kingdom, France and Australia, would
mostly invest in Arakis convertible debt, he said.
Financing deals are partly dependent on Arakis shareholders
approving a doubling of the company's available share capital
at a second part of the company's aannual meeting to be held in
Calgary on July 12.
Arakis currently has about 50 million shares outstanding on
a fully diluted basis.
McLeod declined to discuss the options being proposed for
the structure of a joint venture deal, but said a partner
taking a stake in both the field and the pipeline was one of a
number of possibilities.
Once the pipeline construction starts, it would be about
two years before the project comes on stream, he said.
The company also said on Thursday that it plans to apply to
have its shares listed on the Toronto Stock Exchange.
Arakis, which currently trades on Nasdaq, delisted its
shares from the Vancouver Stock Exchange during last year's
financing controversy.
-- Jeffrey Jones, Reuters Calgary Bureau 403 531-1624 |
