Addax Petroleum Announces Successful Oil and Gas Appraisal Offshore Nigeria
Successful appraisal in OML137 extends Ofrima North discovery
Calgary, Alberta,
May 1st, 2008
– Addax Petroleum Corporation (“Addax Petroleum” or the “Corporation”) (TSX:AXC and LSE:AXC) announced today the successful appraisal of the Ofrima North discovery in OML137, offshore Nigeria.
Commenting, Jean Claude Gandur, President and Chief Executive Officer of Addax Petroleum said: "Our continued exploration success on OML137 is tremendous for Addax Petroleum. We have already booked a considerable amount of oil reserves for Ofrima North at the end of 2007 and we believe that the most recent discoveries give us the critical mass required to develop a successful new standalone oil production hub. In addition, the further dry and liquids-rich gas discoveries continue to substantiate the potential of an integrated oil, liquids and gas development with significant future gas exports from OML137.”
The Corporation has recently completed appraisal drilling in the West and Main fault blocks of the Ofrima North discovery with the drilling of the Ofrima-3 and Ofrima-3A wells. As previously announced on July 6, 2007, Addax Petroleum discovered Ofrima North with the Ofrima-2 well, which was drilled into the Main fault block. The Ofrima-2 well encountered a 170 feet gross oil bearing interval in the H42 reservoir and three gas bearing intervals with individual gross gas columns of 29, 43 and 158 feet at shallower and deeper depths relative to the oil bearing interval.
The Ofrima-3 well was drilled 1.5 kilometers to the west of the Ofrima-2 well in the West fault block. Although the H42 reservoir was water-bearing in the Ofrima-3 well, the well encountered three hydrocarbon intervals in deeper reservoir intervals hitherto undrilled at Ofrima North. The three intervals are a gross hydrocarbon column of 72 feet comprising 30 feet of light oil overlain by 42 feet of rich gas, a gross liquids-rich gas column of 50 feet and a gross light oil column of 32 feet. These intervals were not flow tested but wireline log and static pressure data indicate the presence of light oil and liquids-rich gas in reservoirs of good quality.
Immediately thereafter, Addax Petroleum drilled the Ofrima-3A well, successfully appraising the H42 oil reservoir in the Main fault block. The Ofrima-3A well confirmed, within the Main fault block, the western continuity of the H42 oil reservoir and a common oil water contact with the Ofrima-2 well, located approximately 1 kilometer east from the Ofrima-3A well.
The Corporation believes that the combination of oil discoveries at Ofrima North are sufficient to provide for a standalone development with an FPSO and subsea tiebacks and intend to work closely with relevant Nigerian government agencies on plans for an expeditious development with potential production as early as late 2009. The Corporation also plans additional exploration and appraisal drilling at Ofrima North and the surrounding area.
The Ofrima-3 and Ofrima-3A wells were drilled using Saipem’s Scarabeo-3 semi-submersible drilling rig in water depths of approximately 75 metres. Following the Ofrima North appraisal campaign the Scarabeo-3 returned to the Okwori and Nda fields’ area to commence the 2008 development drilling campaign on those fields.
Ofrima North lies in OML137, is located approximately 80 kilometers west of Addax Petroleum’s Okwori and Nda fields and approximately 15 kilometers south from the Agip-operated Agbara field. In addition, OML137 lies approximately 50 kilometers south of the Nigeria shoreline where the Nigeria LNG terminal and planned Brass LNG terminal are located.
About Addax Petroleum :
Addax Petroleum is an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East. Addax Petroleum is one of the largest independent oil producers in West Africa and has increased its crude oil production from an average of 8,800 bbl/d for 1998 to an average of approximately 126,000 bbl/d for 2007. Further information about Addax Petroleum is available at www.addaxpetroleum.com or at www.sedar.com.
Legal Notice – Forward-Looking Statements:
Certain statements in this press release constitute forward-looking statements under applicable securities legislation. Such statements are generally identifiable by the terminology used, such as “anticipate'', “believe'', “intend”, “expect”, “plan”, “estimate”, “budget'', “outlook'', “may”, “will”, “should”, “could” , “would” or other similar wording. Forward-looking information includes, but is not limited to, reference to business strategy and goals, future capital and other expenditures, reserves and resources estimates, drilling plans, construction and repair activities, the submission of development plans, seismic activity, production levels and the sources of growth thereof, project development schedules and results, results of exploration activities and dates by which certain areas may be developed or may come on-stream, royalties payable, financing and capital activities, contingent liabilities, environmental matters and government approvals. By its very nature, such forward-looking information requires Addax Petroleum to make assumptions that may not materialize or that may not be accurate. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information. Such factors include, but are not limited to: imprecision of reserves and resources estimates; ultimate recovery of reserves; prices of oil and natural gas; general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil prices; refining and marketing margins; the ability to produce and transport crude oil and natural gas to markets; the ability to market and sell natural gas under its production sharing contracts; the effects of weather and climate conditions; the results of exploration and development drilling and related activities; fluctuation in interest rates and foreign currency exchange rates; the ability of suppliers to meet commitments; actions by governmental authorities, including increases in taxes; decisions or approvals of administrative tribunals; changes in environmental and other regulations; risks attendant with oil and gas operations, both domestic and international; international political events; expected rates of return; and other factors, many of which are beyond the control of Addax Petroleum. More specifically, production may be affected by such factors as exploration success, start-up timing and success, facility reliability, reservoir performance and natural decline rates, water handling, and drilling progress. Capital expenditures may be affected by cost pressures associated with new capital projects, including labour and material supply, project management, drilling rig rates and availability, and seismic costs. These factors are discussed in greater detail in filings made by Addax Petroleum with the Canadian provincial securities commissions.
Readers are cautioned that the foregoing list of important factors affecting forward-looking information is not exhaustive. Furthermore, the forward-looking information contained in this press release is made as of the date of this press release and, except as required by applicable law, Addax Petroleum does not undertake any obligation to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.
For additional information, please contact:
Mr. Patrick Spollen
Investor Relations
Tel.: +41 (0) 22 702 95 47
patrick.spollen@addaxpetroleum.com
Mr. Craig Kelly
Investor Relations
Tel.: +41 (0) 22 702 95 68
craig.kelly@addaxpetroleum.com
Ms. Marie-Gabrielle Cajoly
Press Relations
Tel.: +41(0) 22 702 94 44
marie-gabrielle.cajoly@addaxpetroleum.com
Mr. Nick Cowling
Press Relations
Tel.: +1 (416) 934 80 11
nick.cowling@cossette.com
Mr. James Henderson
Press Relations
Tel.: +44 (0) 20 7743 6673
james.henderson@pelhampr.com
Mr. Alisdair Haythornthwaite
Press Relations
Tel.: +44 (0) 20 7743 6676
alisdair.haythornthwaite@pelhampr.com
This announcement does not constitute an offer of, or the solicitation of an offer to buy or subscribe for, common shares of Addax Petroleum to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful and, in particular, is not for release, publication or distribution in or into the United States, Australia or Japan.
The offer and sale of the common shares has not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or an exemption from such registration is available. No public offering of common shares of Addax Petroleum is being made in the United States.
Certain statements in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties described in the Prospectus that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.