SOCO Becomes Operator of Mer Profonde Sud Permit in Congo

PA Resources has entered an agreement to farm-out a 60% working interest in the Mer Profonde Sud permit to SOCO International plc.

The Mer Profond Sud permit comprises the exploration area of the licence but excludes the Azurite field. In return for carrying certain of PA Resources’ costs, SOCO will assume a 60% working interest in the MPS exploration area as operator and will drill an exploration well in the remaining licence period.

This transaction is subject to the necessary partner and regulatory approvals including both the assignment of the interest to SOCO and renewal into the third and final period of the licence. Following completion of the transaction, PA Resources will retain a 25% working interest in the licence, whilst the Congolese state oil company, SNPC, will retain its current 15% interest.
The farm-out will result in an impairment loss of USD 50 million, appr. SEK 320 million, reported in the year-end report 2013.

PA Resources’ CEO, Mark McAllister said: “We are delighted to announce this transaction and we look forward to working closely with our partners to secure the necessary approvals to allow it to proceed. We believe this farm-out is in the interest of all parties since it will continue the exploration of MPS by an established operator in Congo. Following a recent subsurface re-evaluation, we are optimistic about the potential of MPS to host less complex accumulations than Azurite, in close proximity to sizeable fields in production and under development in adjacent licences.”

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November 04, 2013