Brisbane, June 23, 2006 AEST (ABN Newswire) - The German oil and gas company RWE Dea AG farmed in to Global Petroleum's offshore exploration blocks in Malta. As a result Global's share of the costs of seismic work and potentially an exploration well will be carried by RWE Dea.
Announcing the farm-in agreement today, Global Chairman Dr John Armstrong said that RWE Dea is a welcome party in the joint venture. "This farm-in is very good news for Global shareholders," he said. "RWE Dea is an international oil and gas producer and explorer and is part of the RWE Group, one of Europe's largest companies. It is active in exploration and production as operator and non operating partner in Germany, the UK, Norway, Denmark, Egypt, Dubai and Kazakhstan, and holds exploration licences in Algeria, Libya and Poland. In 2005, RWE Dea's oil and gas production was approximately 120,000 boe per day,"
Under the farm-in agreement, RWE Dea earns a 20% interest in the Exploration Study Agreement for Global's Malta Blocks 4 and 5 of Area 3, with Global retaining 80%. RWE Dea plans to undertake seismic studies in the 2nd half of 2006 in the blocks at RWE Dea's cost.
RWE Dea and Global have the option, to be exercised during the term of the Exploration Study Agreement, to enter into a Production Sharing Contract. The minimum work commitment during the first two year exploration period under this Production Sharing Contract is the drilling of one well. By carrying Global's share of the cost of that well on a dry hole basis, RWE Dea will earn an additional 50% in the venture with Global retaining 30% (including a 3% interest on behalf of Envoi Limited, the UK marketing agency that assisted Global in the farm-in process).
Dr Armstrong said that the Malta blocks are located in the southern region of the Ragusa Trough which contains the Vega oil field in the Italian part of the basin and which extends south from Sicily in the Mediterranean Sea. The blocks contain several leads which will be the principal focus of the planned seismic program with RWE Dea.
The Government of Malta has extended the Exploration Study Agreement for a further six months until 31 December 2006 allowing the planned seismic work program which will be operated by RWE Dea to proceed.
Contact
Dr John Armstrong Executive Chairman
Telephone: +61 (07) 3211 1122
Fax: +61 (07) 3211 0133
Web: www.globalpetroleum.com.au
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