South Africa-focused Sunbird Energy has reached an agreement to take a 76 per cent stake in the Ibhubesi gas project, off South Africa's west coast.
Sunbird will make an initial $1.5m payment for the stake followed by a $1m payment upon Ministerial approval of transfer of title, according to upstreamonline.com.
It will also be liable to make a $5m payment on the execution of a gas sales agreement and a $10m payment on a final investment decision on the project or first gas sales.
The deal will see Sunbird take a 100 per cent interest in the South African subsidiaries of Forest Oil Corporation and The Anschutz Corporation, which currently hold the 76 per cent stake.
“Following the recent launch of PetroSA's Ikhwezi project, the Ibhubesi gas field is now the largest undeveloped gas discovery in South Africa,” Sunbird managing director Will Barker said.
“Through this acquisition and the subsequent development of the project, we are able to transform Sunbird from a gas explorer to one of the leading gas developers and producers in southern Africa.”
Sunbird said existing approvals were in place for the drilling and development of the block, a 100 kilometre pipeline to Island Point and an onshore gas processing facility together with other associated infrastructure.
The Ibhubesi field lies within production right Block 2A, which covers roughly 5000 square kilometres in the Orange basin, about 150 kilometres off the coast of the Northern Cape Province.
Sunbird said the field was comprised mainly of a series of channel sand deposits, with reservoir depths ranging from 3000 to 3500 metres at average water depths of up to 250 metres.
Eight wells have been drilled and tested at the field since 1998, with Sunbird noting the discovery wells flowed at an average of 22.5 million cubic feet of gas per day and 351 barrels of condensate per day from the test of a single zone and up to a high of 72 MMcfd with 1450 bpd of condensate from a test of multiple zones.
An independent assessment of the Ibhubesi field in 2009 estimated it held contingent resources of 869 billion cubic feet of gas equivalent.
South Africa's national oil company PetroSA will continue to hold the remaining 24 per cent interest in Block 2A following Sunbird's acquistion of its 76 per cent stake.
