By Christopher Nnanta InvestAdvocate

Lagos (INVESTADVOCATE)-Transnational Corporation of Nigeria Plc (Transcorp), SacOil Holdings Limited (SacOil), and Energy Equity Resources (EER) Tuesday notified the Nigerian Stock Exchange (NSE) that they have agreed to revise the terms of their partnership in Transcorp’s Oil Processing License 281 (OPL 281) in Nigeria.

This was contained in a Statement by Dupe Kupoluyi Olusola, Director, Resources of Transcorp to the Nigeria’s Exchange and made available to www.investadvocateng.com in Lagos Nigeria.

According to the Statement, the revised terms was initiated by Transcorp as a result of a change of control in the Nigerian Company. “In conformance with the change, Transcorp will take full responsibility for the operation of the block in its bid to become a leading Nigerian indigenous oil & gas upstream company with production” the Statement said.

The Statement affirmed that the revised agreement is in line with Transcorp’s vision of building a Pan-African energy business with strong indigenous operational capabilities; “Transcorp Plc is excited by this development and is now poised to lead the process of bringing the asset to production” the Company said.

Following this development, Transcorp has revised the tranches for the fees in OPL 281 for SacOil and its technical joint venture partner,EER.

The Statement said SacOil paid $12.5 million towards the Signature Bonus on February 28, 2011, and $12 million now becomes due once the remaining conditions precedent to the farm-in agreement have been met.

“These conditions include perfection of title and all the necessary Nigerian government and Nigerian National Petroleum Company (NNPC) approvals in relation to the license. By this revision also, EER’s 50% portion of the fees will be carried by SacOil as an interest bearing loan to EER to be repaid from EER’s entitlement to production in OPL 281” the Statement said.

Further to this, Transcorp will remain the operator of OPL 281 and will pay 60% of the costs to first production. “In the previous agreement, SacOil and EER carried 100% of the costs” the Company affirmed.

Robin Vela, Chief Executive Officer (CEO) of SacOil said that Transcorp will also post the performance Bond to the Nigerian government. “Transcorp is also pleased with the revised terms as we will no longer be required to provide Transcorp with carry-on costs from the point of entry to first oil,” Vela said.

According to him, all costs are now carried in proportion to the equity owned by Transcorp, EER and SacOil. “SacOil and EER will be actively involved in the processes through the Operations and Management Committees” Vela said.

The Statement said that according to the production sharing contract (“PSC”) to be executed by the parties, a work program budget of $15 million is estimated for the first phase of the exploration of OPL 281 and involves the acquisition of some 100 sq. km of 3D seismic data across the block and the drilling of at least one well.

A Competent Person’s Report issued by reserves auditing firm, AGR-TRACS International Limited, has attributed a gross unrisked contingent resource of approximately 100MMboe, with additional potential in two further prospects and deeper zones.

In the same vein, Osamede Okhomina, the CEO of EER said the revised commercial term reduces its CAPEX exposure whilst improving its rate of return in the project.

“Furthermore, EER has a key role to play in supporting Transcorp to bring the asset to production” he said.

OPL 281 is an onshore block covering an area of 138km² and is located in the western delta region of Nigeria, 25 kilometers away from the Forcados Crude Export Terminal. From 1967 to 1970, two discovery wells were drilled. The block was reinstated to Transcorp in April 2011. Current equity ownership is Transcorp 60%, EER 20% and SacOil 20%.