It may soon (relatively speaking ..say 2016 - 17) provide some pennies into our piggy bank.......
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16 Dec 2014
Afren, operator of Block 1101 onshore Madagascar, has announced the completion of its drilling and coring operations and the discovery of oil in two boreholes drilled on the block.
A total of four strategic locations on Block 1101, which measures some 11,200 km² (2.8 million acres), were successfully drilled and cored to an aggregate depth of 2,000m (6,500ft) with approx. 1,760m (5,720ft) of core samples recovered. Drilling at each of the locations successfully completed the respective technical objectives to assess specific aspects of the Block's petroleum systems.
Two core holes were drilled to depths of 650m (2,112ft) and 500m (1,625ft) adjacent to the 1902 coal borehole (Ankaramy-1) which had reportedly encountered 'hydrocarbon shows'. Cores recovered from both locations indicated the presence of hydrocarbons and potentially good reservoir quality over multiple zones. Early indications provide further evidence of at least three different source rocks working across the Block in Triassic, Jurassic and Cretaceous zones. Further detailed analysis of the cores will be undertaken in Q1 2015 to confirm the nature and extent of the hydrocarbons.
Toby Hayward, Interim Chief Executive of Afren, commented:
'We have made good progress on Block 1101 with encouraging results indicating the presence of oil over several zones. This underscores the high quality of our East African portfolio and we look forward to working with our partner (Oyster Oil and Gas) to determine the nature and extent of the discovery.'
Block 1101, onshore Madagascar
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As a reminder to all:
Madagascar:
Block 1101 is an onshore exploration permit located in northwest Madagascar, covering 14,900 km2. Candax has ceased all operations under this block and only kept a royalty interest.
On June 28, 2013, Candax announced that its subsidiary, Candax Madagascar Limited ("CML"), reached an agreement to sell its 10% working interest in Block 1101 in Madagascar to Oyster Oil & Gas Limited ("Oyster").
On October 23, 2013, the Company received the sale proceeds of Cdn$500,000 which represents the last step to reach completion pursuant to the Sale and Purchase Agreement dated on September 6, 2013.
An additional Cdn$500,000 is to be paid in a combination of cash and shares of Oyster upon the drilling of the first exploration well on the Block. In addition, Candax is entitled to royalties up to Cdn$3,000,000 from Oyster upon the successful commercial development of the field. Through a royalty agreement with East African Exploration Madagascar Ltd (EAX, a wholly owned subsidiary of Afren Plc), Candax is also entitled to receive a fourteen percent (14%) share of all net EAX production proceeds, up to a cumulative total of three million, five hundred and fifty thousand US dollars ($3,550,000) as well as a 0.33% share of all net EAX production proceeds up to a cumulative total of fifteen million US dollars ($15,000,000).