Sterling Energy plc has decided to relinquish its stake in the Block C-3, offshore Mauritania, after seismic data shows no firm reason to press ahead with exploration.
As part of the withdrawal, the company said it would assign its entire 40.5% participating interest in the production sharing contract for Block C-3, located offshore in the Islamic Republic of Mauritania (the ‘PSC’) to Tullow, at no cost to Tullow.
Completion of the withdrawal remains subject to the approval by the Government of the Islamic Republic of Mauritania. Upon completion of the assignment the holders of the PSC will be: Tullow (Operator) 90% Société Mauritanienne des Hydrocarbures et de Patrimoine Minier 10%
Tullow in 2014 acquired 1,600km of 2D seismic. Following receipt of the processed regional 2D seismic (comprising ca. 1,854 line kms), Sterling said it was of the view that the 2D seismic data had not sufficiently de-risked the block potential, to justify the company entering into Phase 2 of the Production Sharing Contract in June 2016. Phase 2 includes a minimum work obligation of 700km2 of 3D seismic and the drilling of 1 well.
Sterling said that the withdrawal from Block C-3 does not impact its interest or activity in Block C-10 and the company said it “looks forward to working with Tullow to mature the existing portfolio and finalise the planned well on Block C-10 for 2017.” To remind, Sterling the acquisition of a 13.5% working interest in the production sharing contract for Block C-10, in November 2015.
Eskil Jersing , the Company’s Chief Executive Officer said: “Our entry into the C-3 block was prefaced on the block providing dependent running room for the immature shelfal Cretaceous and Jurassic plays recognised in Block C-10. In our opinion the newly acquired and processed regional 2D seismic has not sufficiently de-risked Block C-3 to enable Sterling to commit to enter into Phase 2 of the PSC due to begin in June 2016.
He added: “The withdrawal from Block C-3 is entirely in-line with our approach of disciplined exploration. We would like to thank Tullow for all its efforts as operator over the last year and SMHPM, the National Oil Company of Mauritania, for their support and look forward to continuing to work with them to de-risk and mature the remaining potential in Block C-10.”