(MENAFN- ProactiveInvestors - Australia) Sirocco Energy (ASX: SCY), formerly known as Agri Energy, is acquiring a stake in a giant oil and gas block in Sudan - with the company's managing director, Greg Channon, in Sydney this week talking to investors.
Channon, made his presentation at the Proactive Investors "Stars in 2013 Series", which was attended by over 175 investors.
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Sirocco is acquiring a 37.4% beneficial interest in the 100,000 square kilometre Block 14 via the purchase of a direct 49.9% interest in Statesman Africa Ltd from Statesman Resources Ltd (TSXV: SRR) for a nominal consideration.
Block 14 is located within an oil province in the remote and uninhabited northwest corner of Sudan that abuts the borders of Egypt and Libya. This province hosts oil reserves of 4.4 billion barrels of oil in Egypt and 47 billion barrels of oil in Libya.
An independent report by Senergy Ltd has identified that Block 14 has potential for a gross un-risked total prospective resource of 1.5 billion barrels located within 30 traps that could each contain 50 million barrels of oil.
Existing seismic over Block 14 is likely to be reprocessed with scope for data exchange with adjacent blocks while future seismic acquisition will use fast track processing and interpretation to maximise the chance of identifying drillable targets.
The minimum 1,000 kilometres of 2D seismic could firm up to four leads as drilling prospects.
Channon answers questions from the floor
Questions were fielded from the floor by Channon, with an extract outlined below:
QUESTION FROM THE FLOOR
What is your license period?
GREG CHANNON
Our license period runs for three years committed, and then an option for two one-and-a-half periods, so we can have it for up to six years in the exploration phase and the production phase runs for 35 years.
QUESTION FROM THE FLOOR
How can I obtain a prospectus?
GREG CHANNON
You can go to our website at; http://siroccoenergy.com.au/, and you can download the prospectus from here; http://siroccoenergy.com.au/prospectus; or call me on +61 89 486 4036.
QUESTION FROM THE FLOOR
With some majors exploring near your project area, if they get some good results, could that potentially impacting your share price once you re-list on the Australian Stock Exchange?
GREG CHANNON
Absolutely. And I think we are fortunate that very significant oil companies are to both the north and the south - exploring within a 100 kilometres of our block - exploring identical play types.
We are also in touch with both of those companies in respect to sharing data, and there is no question that if there is a discovery or a significant indication of hydrocarbons is made - then there is the potential for a tremendous impact on our block.
I think that is part of the romance of our company, as you get that option for majors to work what we hold.
QUESTION FROM THE FLOOR
You said that you are sharing data with the majors, and if they discover something on their block which is similar to yours - do you see any way these majors could farm-in to your block to help you with drilling costs?
GREG CHANNON
Well quite possibly. Our strategy with respect to going forward is to keep all of our options open.
I will point out that a well cost in this region is probably in excess of $10 million, so it will all depend on the mobilisation or de-mobilisation (costs of the drilling rig).
I would also like to point out that our share of that (total cost) might only be $5 million - and if you look around at small caps. in Africa, and as an example they might be in a deep water block in Tunisia or perhaps even Mozambique, the well costs there are a $100 million - and those companies will live or die by their farm-out campaign.
Where as for us, I feel that these costs are modest and we do have the option to drill it ourselves - or farm it out in the future.
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