Madagascar Oil Completes Farmout Agreement With TOTAL
Houston & Antananarivo - Madagascar Oil announced it has closed on the farmout of a 60 percent interest and operatorship in the license for the vast Bemolanga oil sands accumulation to French supermajor TOTAL. Madagascar Oil is a private oil and gas company holding the largest onshore licensed acreage in Madagascar.
The Bemolanga accumulation is one of the largest undeveloped bitumen reserves in the world, with more than 16 billion barrels of oil in place, according to an independent appraisal by DeGolyer & MacNaughton. If successful, it is anticipated that the partnership's mining project will develop 2.5 billion barrels of recoverable resources and have the capability to produce 180,000 barrels of oil per day for more than 30 years.
TOTAL will operate the project, while Madagascar Oil will retain a 40 percent interest in the Bemolanga license. Terms of the transaction were not disclosed. Jefferies International Limited and Scotia Waterous Inc. served as the Company's advisors in the transaction.
"We are excited to bring in TOTAL as the operating partner of Bemolanga. TOTAL's experience in other oil sands projects and large-scale integrated developments worldwide will greatly benefit the project and position it forward for potential development," said Madagascar Oil Chief Executive Officer Alex Archila. "The advancement of the field's appraisal program and its potential eventual development will not only benefit the partnership, but also the people of Madagascar."
Madagascar Oil also holds a 100 percent interest in a license containing the large heavy oil field, Tsimiroro, as well as 100 percent interest in four additional exploration licenses onshore Madagascar. Results from the 2008 exploration drilling campaign have confirmed approximately 500 million barrels in place for the Tsimiroro area prospects drilled to date. An independent risked assessment performed by Weinman GeoScience estimates that the block could contain as much as 1.2 billion barrels in place. The Company is currently conducting a steam injection pilot project and has been producing oil since March 2008.
SOURCE: Madagascar Oil