Corcel acquires first oil-gas project

Corcel plc has acquired its first oil and gas asset via a shares transaction for 90% ownership of Atlas Petroleum Exploration Worldwide Ltd (Apex) operating in the Kwanza Basin, onshore Angola. 

RESOURCE

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.

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

Corcel added that the purchase marked the start of its “pan-Angola/Brazil strategy”, capitalising on the countries’ resource, historic ties, 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,” said 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 added 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 million Corcel new ordinary shares at a price of £0.004, locked for 18 months.

Apex shareholders and oil and gas investors in Brazil and Angola will simultaneously invest £282,741 in Corcel, for 70,685,250 new ordinary shares at a price of £0.004 to be issued in tranches.

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.