This is EER’s first asset and provides the company with a platform to build upon.

EER's President, Olav Eimstad, says, “This award with ChevronTexaco as operator, alongside ExxonMobil gives us access to their highly-valued deepwater expertise”.

JDZ Block 1 is reported to hold up to a billion barrels of oil and gas reserves.

The total signature bonus for JDZ Block 1 is US$123 million.

EER’s Senior VP for Business Development, Osamede Okhomina says, “This is a great day for all and especially for the people of São Tomé and Príncipe. If, as our technical reviews indicate, Block 1 holds significant reserves, the people of São Tomé and Principe will reap substantial  benefits in all aspects of their socio-economic life.”

EER receives an up front capital payment plus the right to further payments in the event commercial reserves are discovered and a development plan approved.

EER’s president Olav Eimstad observes that, “Strategically, as a young company, we were always of the opinion that our long-term interests were best served by avoiding significant financial exposure on our first asset.  The deal with Afren is very good for EER because it gives us working and development capital, but also allows us a considerable advantage in the event that exploration activities are successful.”

Afren is an independent oil and gas exploration, production and development company whose centre point of activity is the Gulf of Guinea region.  The company is listed on the AIM market of the London Stock Exchange.

It shares this award alongside designated operator, Anadarko, as well as ERHC, Ophir, Equinox Oil and Gas and Pioneer.

JDZ Block 3 is located offshore in the Gulf of Guinea, between Nigeria and São Tomé and Príncipe.

The total signature bonus for the JBZ Block 3 is US$40 million.

The award enables EER to gain 5 – 10% interest in each of the two exploration areas (Area 2 – Blocks 1 & 2 and Area 40 – Blocks 3 & 4) that were awarded during the Second Licensing Round hosted in Tripoli, Libya.

EER considers the block, situated in the JDZ (an area of 35,000 sq km that overlaps maritime boundaries of both Nigeria and São Tomé and Príncipe) a valuable addition given the area’s proximity to the prolific Niger Delta.

EER has a 10% paying interest in the next Aje-4 appraisal well and a 7.5% paying interest in the potential development of the Aje field.  Entry into this license is seen as a first step in positioning EER in the rapidly-evolving Nigerian gas market with gas monetization options for the Aje gas now targeted at the Lagos industrial market or the West Africa Gas Pipeline (WAGP) which passes through the OML 113 license, close to the Aje field.

The Ajapa-1 well found a number of hydrocarbon columns and the well tested at an aggregate rate of 6,047BOPD of 50API crude and 12.7MMSCFGPD from 2 sands.

EER has a 50% paying interest in further field appraisal and development, which after cost recovery, reverts to a 20% working interest. Going forward, the plan is to drill the Ajapa-2 well and progress rapidly towards field development.

The original license, OPL 224, was granted to Oriental Energy Resources Ltd on 21 September 1990 and was converted to OML status on 20 May 1999 based on the commerciality of the Ufon gas discovery. In total 6 wells have been drilled on the block – 1 oil discovery (Okwok 3), 1 gas discovery (Ufon) and 4 dry holes. EER currently sees two principal exploration targets – the shallow Agbada sands and deeper ‘Qua lboe’ targets. EER’s strategy will be to initially target the lower risk shallower Agbada prospects, with a view to bringing on production as quickly as possible once a commercial discovery is made.