Corcel acquires first oil and gas project

Corcel plc has acquired its first oil and gas asset with 90% ownership of Atlas Petroleum Exploration Worldwide Ltd (Apex) in the Kwanza basin, onshore Angola. 

ASSETS

The acquisition also sees executive chairman James Parsons return to familiar commodities, having started his career in oil and gas with Royal Dutch Shell in Brazil.

Apex, with headquarters in Houston, holds 20-35% working interests in three blocks containing two historically producing oilfields for re-development and one exploration licence.

KON-11 is non-operated and has 12 historical wells with Apex holding a 20% working interest 18% net to Corcel.

KON-12 also non-operated holds eight historical wells. Apex has a 25% working interest, 22.5% net to Corcel.

KON-16 is operated and contains one historical well, with a 35% working interest, 31.5% net to Corcel.

KON-11 and KON-12 are considered brownfield development opportunities and include the historically producing Tobias and Galinda fields.

RESOURCE

Petrofina drilled both fields in the 1960s and 1970s, with combined historic production over 30 MMbbls. The operator is now Angolan national oil company, Sonangol.

Corcel said that Tobias and Galinda have a potential of 85 MMbls P50 gross unrisked remaining contingent oil resources (APEX estimates), with 15.98 MMbls net to Corcel.

Additional exploration potential exists of 1,460 MMbls gross unrisked P50 prospective oil resources post-salt/pre-salt (Apex estimates), with 297.1 MMbls net to Corcel.

GROWTH

The purchase marks the start of Corcel’s “pan-Angola/Brazil strategy”, capitalising on the countries’ resource opportunities, historic ties, and shared geology and language.

“The Kwanza basin has been producing for 35 years, is a well understood petroleum system and has both significant scale and upside,” added Mr Parsons who plans to sign the conditional deal in Angola later this week. 

“Corcel sees significant opportunities to increase the legacy operator estimated resources given the structural configuration of the basin and recent new structural mapping. 

“We also see large stratigraphic and structural pre salt structures on blocks, analogous to the offshore Cameia discovery. 

“Our initial focus will however be on quickly securing first oil and revenues through our redevelopment opportunities.”

He said that the acquisition opened the window for “rapid further consolidation onshore Angola alongside new asset acquisitions in Brazil”.

Corcel has also appointed two of the vendors to its board, subject to regulatory checks.

TERMS

Payment of £800,000 will be with 200,000,000 Corcel new ordinary shares at a price of £0.004, locked up for 18 months.

Apex shareholders and investors from the oil & gas sector in Brazil and Angola will simultaneously invest £282,741 in Corcel, resulting in the issuance of 70,685,250 in tranches of new ordinary shares at a price of £0.004.

Corcel said that proceeds from the recent partial sale of its Mt Weld rare earths project in Australia and the vendor placing fully funded the acquisition.

Following admission of 278,730,339 new ordinary shares, the company’s total issued share capital will comprise 1,220,091,631 ordinary shares, each with one voting right. Corcel holds no shares in treasury.