re: IOX.OL - SIGNING OF BLOCKS 5 & 6 IN ANGOLA
November 6, 2006 - Oslo, Norway - InterOil
Exploration & Production ASA (InterOil) (OSE:
IOX) has, on November 3, 2006 signed the
Production Sharing Agreement (PSA) for Blocks 5
& 6 in Angola. These awards are an important
step in InterOil`s process of establishing
operations in West-Africa.
InterOil is now a 40% participant in Block 5,
where Vaalco Energy Inc. is operator with an
equal interest. Sonangol P&P (national oil
company of the Republic of Angola) is also a
partner with an interest of 20%.
In Block 6 InterOil is participating with 20%,
where Petrobras is operator with an interest of
40% and Sonangol, Initial Oil & Gas and Falcon
Oil are partners with a total interest of 40%.
Blocks 5 & 6 are located in the shallow water
(50 - 500m) areas of offshore Angola, and are on
trend with major discoveries and production both
North and South of the two blocks. 3D seismic
has been acquired in the late 90`s and in 2001
and will form the basis for a new exploration
phase.
Block 5 is 5 708 km² and is located in the
Kwanza basin in the northern waters offshore
Angola. 95% of the block has a water depth of
less then 200 meters. The acreage is equivalent
to approximately 10 offshore blocks in the North
Sea. The block was first licensed to Total in
the 1970s. The area was further developed by
Conoco and Sonangol throughout the 1980s and
1990s. Twelve wells have been drilled in block 5
by the previous operators, which resulted in 5
discoveries. These oil accumulations were, at
the time, deemed non-commercial, although it is
reported by Sonangol that they discovered
approximately 50 million barrels in three
separate structures. A 3D seismic survey has
already been acquired that covers the most
prospective areas and the data quality is such
that Interoil expects to firm up the potential
and drill during 2007, subject to rig
availability.
Block 6 covers an area of 4 930 km² and is also
located in the northern area of Kwanza Basin
offshore Angola. The water depth ranges from 50
meters to 500 meters.
Block 6 was first licensed to Total. After being
further developed by Conoco and Sonangol, it
will now be operated by Petrobras. 8 wells have
been drilled by the previous operators, which
resulted in 2 heavy oil discoveries. The largest
of the discoveries is the Cegonha heavy oil
field, which according to Sonangol contains 135
million barrels of oil. The discovery of heavy
oil in two wells gives rise to optimism, as the
new operator has extensive experience in the
development of such fields. A 3D survey has now
been acquired over the Cegonha field and
additional 3D will be acquired in Block 6.
All previous discoveries in Blocks 5 & 6 were
based on 2D data.
InterOil`s share of the signing fee for the two
blocks amount in total to USD 24.75 million. The
working program for the partners in Blocks 5 & 6
over the next 4 years include drilling of 2
exploration wells in each block and shot or
acquire existing 3D seismic in total of 2 200
km². InterOil`s share of the working program
will cost approximately USD 25 million.
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InterOil Exploration & Production ASA is an
international independent petroleum company with
headquarter in Oslo. The company is engaged in
the acquisition, exploration, development and
operation of oil and natural gas properties.
InterOil E&P serves as operator or active
license partner in several production and
exploration assets in Peru, Colombia and Angola.
InterOil has a total of 156 employees.
For more information, please contact:
Fredrik von Zernichow
Investor Relation Manager
Tel: +47 6751 8661
Mob: +47 9927 3843
Fax: +47 6751 8660
E-mail: f.zernichow@interoil.no
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