Perth-based Global Iron has entered into a ‘company transforming’ transaction to acquire Cayman-Islands-based private company African Petroleum (APCL), which holds the rights to two highly prospective oil and gas exploration blocks located offshore Liberia, West Africa in a deal valued at approx. A$500 million. The Liberian acreage covers an area of around 7,200 sq km. Water depths range from 200 metres to over 3,000 metres.

Independent oil and gas specialist consultant, IHS Global, has determined that the Liberian blocks have potential for combined un-risked total P50 recoverable prospective resources 1,875 million barrels with a range of 945 to 3,043 million barrels, within the Lower Cretaceous interval.

Norwegian seismic company TGS is planning to acquire 5,000 sq kms of 3D seismic over the blocks as part of a multi-client survey offshore Liberia. Previous drilling on the blocks in the early 1970s and mid-1980’s recovered oil shows in six out of seven wells drilled.

Licences offshore Liberia - including Blocks 8 & 9. Blocks 1, 2, 3, 4 & 5 are on offer in the Third Liberian Offshore Petroleum Licence Round which closed Feb 1 2010

Under the deal, Global will take a stake of between 95% and 100% in African by issuing more than 900 million shares to African shareholders. As part of the deal Global is required to raise between A$130 million and A$230 million by way of a separate share placement. Global will change its name to African Petroleum Corporation Limited on obtaining the necessary shareholder approvals.

On completion of the acquisition, the Global will hold 100% of the interest and rights associated with Blocks 8 and 9. APCL has engaged a fully integrated geological team from Senergy (GB) to support it in completing a full geological model for Blocks 8 and 9, which will include the interpretation of 3D seismic data and the identification and ranking of potential drill targets. In addition to Blocks 8 and 9, APCL is actively pursuing the acquisition of additional offshore licence blocks in West Africa. Applications have already been made in Sierra Leone and Liberia.

Global Executive Chairman, Tony Sage said: 'To have entered into an agreement to acquire a company that has such highly prospective oil and gas exploration assets, together with the potential to raise up to A$230 million to fund the advanced exploration and potential development of these assets puts the Company in an excellent position to potentially deliver significant value to shareholders.'

For information regarding upstream opportunities in Liberia and elsewhere in West Africa, visit energy-pedia opportunities, our 'premium content' service.

Source: Global Iron