PPA NewsPANORAMA SIGNS AN MOU FOR AN OIL BLOCK IN SUDAN.
Panorama Petroleum Inc. has entered into a memorandum of understanding (MOU) with State Petroleum Overseas Inc., a private non-arm's-length British Columbia corporation, to acquire 100 per cent of the shares of State from the State shareholders subject to certain conditions precedent. State is a signatory to an exploration and production sharing agreement (EPSA) with the government of the Republic of Sudan on block 26 D/E (formerly block 7), Rawat basin, North Sudan, covering an area of 25,529 square kilometres, pursuant to which State holds a 50-per-cent interest in block 26 D/E.
Block 26 D/E is situated in the southeast of North Sudan, and the area is readily accessible. An existing pipeline that connects to the export pipeline to Port Sudan runs through the block, and a central processing facility (CPF) is also located within the boundary of the block.
Rawat basin
The basin is within the White Nile Rift system and is analogous to the northern extension of the Melut basin. The Melut basin has a significant number of producing wells. Both Cretaceous and Tertiary strata are preserved in the Rawat basin, and they attain maximum thickness of more than 5,000 metres adjacent to master normal faults. The reservoir rock is sandstone with shales, with good reservoir parameters, and the block is viewed by State as highly prospective and substantially derisked due to the existence of two discovery wells.
Existing data:
The block has extensive seismic coverage, both 2-D and 3-D, in addition to other geological and geophysical data. Various prospects and leads have been seismically identified according to State.
Discovery wells:
Block 26 D has two discovery wells with light 30-degree (plus or minus) API crude oil. The well depths are plus or minus 1,800 m. The reserve/potential resource estimates are subject to an independent National Instrument 51-101-compliant technical report.
The MOU conditions precedent are (1) the execution of a definitive agreement that establishes, in part, the consideration to be paid by Panorama to the State shareholders; (2) Panorama obtaining TSX Venture Exchange approval to the terms and conditions of the definitive agreement and completing, with TSX Venture Exchange approval, a private placement in an amount to be defined in the definitive agreement; and (3) Panorama obtaining its board of directors' approval.
Management has prior experience in Sudan through the development of the Heglig and Unity fields, which were brought through to production.
Panorama further reports that a shares-for-debt agreement has been reached with Maverick Petroleum Ltd. (a creditor) for a $675,000 debt through the issuance of three million common shares at 22.5 cents per common share. Panorama has received TSX Venture Exchange approval for this shares-for-debt conversion. All common shares to be issued in this transaction will be subject to a four-month hold period.