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SHALLOW WATER CAPE THREE POINTS

OPERATOR: Sahara Energy Fields Ghana Ltd – 85% interest in block

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OTHER CONTRACTING PARTIES:

  1. Ghana National Petroleum Corporation (GNPC) – 10% Interest in Block

  2. Sapholda E&P Limited – 5% Interest in Block

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Effective Date of Petroleum Agreement: July 17, 2014

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Exploration Period: 4 Years And 9 Months

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Current Phase of Operations: Initial Exploration Period (1 year and 9 months): [ July 17, 2014 – April 16, 2016]

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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.

 

FISCAL TERMS

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.

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Surface Rental

Additional Oil Entitlement: Refer to the Petroleum Agreement.

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