16th Oct 2015 06:39
LONDON (Alliance News) - Gulfsands Petroleum PLC Thursday said it has had to forfeit USD5.0 million because it failed to complete a minimum work programme in Morocco, after its partner rejected a request to extend the agreement between the two companies.
The Fes agreement is between Gulfsands and the state-owned oil company in Morocco, and Gulfsands has been trying to source a partner to assist it with completing a minimum work programme on the Fes licence.
However, the agreement expired on September 24, by which point Gulfsands was expected to have drilled three exploration wells and completed seismic work. The company applied for an extension to the agreement with the state-owned oil company to give it more time to source a partner, but this was rejected.
"We are disappointed not to have been given an extension to progress our discussions with potential farm-in partners. The geology within the Fes area is very complex; only recently have we been able to interpret the re-processed 2D seismic data acquired in early 2014 and begin the process of identifying potential drill-ready prospects. Unfortunately we have run out of time to continue the exploration programme," said Chairman Alastair Beardsall.
Therefore, Gulfsands did not complete the minimum work programme and has had to forfeit USD5.0 million that was set aside as a guarantee for completing that work.
The company had already impaired the Fes agreement on its balance sheet back in June, totalling USD22.1 million, comprised of the full amount of expenditure incurred in relation to the Fes agreement including restricted cash balances and the fair value attributed at acquisition.
By Joshua Warner; [email protected]; @JoshAlliance
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