SHALLOW WATER CAPE THREE POINTS
OPERATOR: Sahara Energy Fields Ghana Ltd – 85% interest in block
OTHER CONTRACTING PARTIES:
Ghana National Petroleum Corporation (GNPC) – 10% Interest in Block
Sapholda E&P Limited – 5% Interest in Block
Effective Date of Petroleum Agreement: July 17, 2014
Exploration Period: 4 Years And 9 Months
Current Phase of Operations: Initial Exploration Period (1 year and 9 months): [ July 17, 2014 – April 16, 2016]
Minimum Initial Exploration Programme
Drill one (1) exploration well
Conduct G&G studies
Minimum Expenditure: US$ 32 million
Status of Operations
Sahara signed a seismic agreement with the state on December 3, 2008 to acquire, process and interpret a minimum of 1,000 sq. km of 3D. Approximately 1254 sq. km of 3D seismic was acquired over the block in 2009, and subsequently processed and interpreted. On this basis, Sahara had the right of first refusal to apply for E&P rights over the block.
Since the block became effective, the Contractor conducted geological and geophysical studies (generation of leads and prospects, AVO analysis, sequence stratigraphy studies, basin modelling), but failed to drill the obligatory exploration well within the Initial Exploration Period which expired April 16th, 2016. The Contractor failed to honour an invitation from the Commission for a technical engagement during the first half of 2017.
Royalty: Twelve and one half percent (12.5%) 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.
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.