29th May 2014 11:21
LONDON (Alliance News) - Sterling Energy PLC Thursday said it has been granted a two-year extension to the current work period on its Odewayne production sharing contract by the government of Somaliland.
The oil and gas exploration company said that the decision was made after the Somaliland government decided to establish a new Oilfield Protection Unit, which allows future seismic and drilling operations in the war-torn state to be carried out safely.
The company said the amendment to its current contract on the site reflects delays which will be incurred while the unit is being established.
The production sharing contract is over a region of 22,840 square kilometres and is currently in its third phase, which will now expire in November 2016, with an outstanding minimum work obligation of acquiring 500 kilometres of 2D seismic.
The minimum work obligation during the fourth phase of the production sharing contract, which now expires in May 2018, is for the acquisition of 1,000 kilometres of 2D seismic and drilling one exploration well.
"We are pleased with the progress in creating the Oilfield Protection Unit and look forward to commencing seismic operations in the Odewayne area as soon as possible. We thank the government of the Republic of Somaliland for granting the 2 year extension to allow for the necessary preparations to be made for the future conduct of operations in a safe and secure manner," Chairman Alastair Beardsall said in a statement.
Sterling Energy shares were down 0.7% to 28.81 pence on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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