EAST CAPE THREE POINTS
OPERATOR: Medea Development Limited- 36% interest in block
OTHER CONTRACTING PARTIES:
Cola Natural Resources-54% interest in block
Ghana National Petroleum Corporation (GNPC)- 10% interest in block
Contract Area Size:1,565 sq.km
Effective Date: December 4, 2013
Exploration Period: 6 years
Current Phase of Operations: Initial Exploration Period (3years): [ Dec. 4, 2013 – Dec 5, 2016]
Extension (s): + 1 year [ Dec 06, 2016 to Dec 5, 2017]; 1½ years [ Dec 5, 2017 to June 6, 2019]
Minimum Initial Exploration Programme
Acquire 1200sqkm of 3D seismic data
Conduct geological and geophysical studies
Drill one (1) exploration well
Minimum Expenditure Obligation: US$25,000,000
Status of Operations
Contractor acquired 1,450sqkm of 3D seismic data (September 28, 2014 – February 04, 2015) and completed processing and interpretation of the data. Prospects have been identified and mapped in the Paleozoic and Lower Cretaceous levels within the block and are being matured
The Contractor to date has met most of its minimum work obligation, thereby its performance has been satisfactory pending the drilling of one exploratory well.
The initial Exploration period was to expire on December 05, 2016. However, the contractor had challenges with fishing activities and weather conditions during the seismic acquisition and upon request was granted a one (1) year extension by the then Minister of Petroleum in April 2016 to allow sufficient time to complete Work Programme obligations for the Initial Exploration Period.
The Contractor indicated that there is a need to undertake 3D basin and petroleum systems modeling to reduce the risks associated with their prospects prior to drilling the obligatory well. The Contractor thus applied for another extension and received one and half(1½) years extension to the Initial Exploration Period in July 2017 by the Petroleum Commission.
Royalty: Ten percent (10%) of the Gross Production of Crude Oil shall be delivered to the State as Royalty.
The Royalty to be delivered to the State on Natural Gas shall be at the rate of five percent (5%) for the Natural Gas destined to the domestic market and ten percent (10%) for Natural Gas to be exported as LNG.
Income Tax: In accordance with the provisions of the Income Tax law, petroleum income tax shall be levied at thirty five percent (35%).
Withholding Tax: Contractor shall not be obliged to withhold any amount in respect of tax from any sum due from Contractor to any Subcontractor in respect of work and services for or in connection with this Agreement.
Additional Oil Entitlement: Refer to the Petroleum Agreement.