OREANDA-NEWS. Petsec Energy has executed an agreement with a wholly-owned subsidiary of AWE Limited to acquire its 21.25% Participating Interest in the Block 7, Al Barqa Permit, in the Republic of Yemen.

Block 7 is an onshore exploration permit covering an area of 5,000 sq kms (1,235,527 acres) located approx. 340km east of Sana’a, the capital of Yemen. The block is operated by Australia’s Oil Search and contains the Al Meashar oil discovery as well as an inventory of leads and prospects defined by 2D and 3D seismic surveys with significant oil potential.

The terms of the transaction include a cash consideration of USD 1 million; the replacement of AWE’s existing Letter of Credit with the Arab Bank; and working capital adjustments on completion. Completion of the transaction is subject to customary approvals from the Joint Venture Partners and the state owned Yemen Oil and Gas Company.

Petsec Energy’s Chairman, Terry Fern, commented on the Agreement:

'The signing of this agreement is the culmination of a number of years of strategic planning and marks the start of an expansion of Petsec’s portfolio of assets into the Middle East, with the aim of securing high value assets within a region that is highly prospective for oil. Block 7 has the potential to add significant oil reserves to the company’s resource base and significant value to its shareholders. We look forward to working with the operator, Oil Search, to further appraise the Al Meashar oil discovery and explore the remainder of the Block'Petsec Energy’.

On completion of the transaction the interests in Block 7 (Al Barqa) will be: Petsec Energy Yemen Ltd 21.25%; Oil Search (ROY) Limited 34.00%; KUFPEC (Aden) Limited 21.25%; Mitsui E&P Middle East B.V. 8.50%; The Yemen General Corporation for Oil and Gas 15.00%.