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OPPORTUNITY

DEEP WATER CAPE THREE POINTS BLOCK INVESTMENT OPPORTUNITY WITH GOIL UPSTREAM IN GHANA, WEST AFRICA

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DEEP WATER CAPE THREE POINTS BLOCK INVESTMENT OPPORTUNITY WITH GOIL UPSTREAM IN GHANA, WEST AFRICA

GOIL Upstream Ghana Limited was incorporated by GOIL PLC as a wholly owned subsidiary to operate in the upstream segment of the industry as part of a diversification strategy through a backward integration.

A Petroleum Agreement (PA) in respect of the Deep Water Cape Three Point (DWCTP) block became effective on 3rd April 2019 after Parliamentary ratification. This was between the Government of the Republic of Ghana, Ghana National Petroleum Corporation (GNPC), ExxonMobil Exploration and Production Ghana (Deepwater) Limited and GOIL Upstream Ghana Limited.

ExxonMobil's 80% participating interest having been transferred to the remaining Contractor Party, GOIL Upstream Ghana Limited now holds 85% Participating Interest with GNPC holding a 15% Carried Interest. This comes with a mandate to find a strategic partner which opens an exciting investment opportunity in deep water exploration and production in the prolific Tano Basin of Ghana.

The Tano Cape Three Points Basin is where exploration activities have been consistent in the last ten (10) years. This Basin has a prolific deep-water geological structure that plays host to numerous oil, gas and condensate discoveries.

The Jubilee Oil Field is located to the north of the block, while the Paradise, Pecan and Almond oil/condensate discoveries are located to the west, and the Dzata oil/condensate discoveries located to the east of the contract area.

The Deep Water Cape three Points Block is situated south of Eni’s Sankofa - Gye Nyame Field, upstream the prolific Tano-Cape Three Points Basin. The block measures approximately 1474 sq.km and is in a water depth range of 2000 – 2500m.

The working play type is the Cretaceous Play, which consists of Cenomanian, Turonian and Albian shales as source rocks and Turonian slope fan turbidite sandstones and Albian sandstones in tilted fault blocks as reservoirs.

Initial analysis shows the block has a compelling combined resource potential (STOIIP) of 3,095 MBO so far with an upside potential of over 1,889 MBO.

Data Coverage includes the following;

5 Offset Wells: Dzata-1X, Dzata-2A, Nyankom-1X, Pecan Southeast, Lynx-1X
2D Seismic Data: various vintages
3D Seismic Data: 3392sq. km
Well Reports & Commissioned Studies
3D Seismic interpretation/analysis products for further assessment

Minimum Exploration Programme requires the Contractor to undertake the following;

Conduct Geological and Geophysical Studies
Drill One Exploration Well

GOIL Upstream seeks a technically competent and financially capable partner preferably with deepwater operating experience.

We are confident that with Ghana’s investor-friendly fiscal regime and a stable working environment, an Operator will soon take advantage of this attractive investment opportunity, since the block has been declared as having a high quality, material and achievable opportunities to create competitive value.

Ghana’s Fiscal System can best be described as a hybrid of Royalty/Tax and Production Sharing Contract as it tends to blend the features of both systems.

Key elements in Ghana’s fiscal system include;

Royalties that ranges from 10% of gross oil production;
5% of volume of gas exported,
Corporate Income Tax of 35% and the option of being ring fenced and determined on field basis (development and production area)
Additional Oil Entitlement (AOE) and State Participation in the form of Initial Participating Carried Interest and Additional Participating Interest.
Other Negotiable Payments with respect to a One-time Technology Support, Training Allowance which is an annual training support and Local Content Fund.
Surface Acreage Fees which ranges from $50 per square km to $200 during the Exploration phase and tapers down to $50 per square km within the Development and Production phase of the project.

The fiscal regime underpinning petroleum agreements in Ghana provides a favourable investment framework which guarantees attractive returns on investment to Contractors generally applicable to industry. It guarantees significant incentives in the form of exemptions and concessionary tax rates distinct from those generally applicable to industry. For e.g. exemption from VAT, Export Taxes, customs and other duties, taxes, fees and charges on imported plants, equipment and materials used solely and exclusively in the conduct of petroleum operations.

The fiscal elements have strong merits in profitability, risk sharing and progressiveness.

For instance, the regime provides for quicker cost recovery, allowing 100% recovery of OPEX and abandonment expense in the period of expenditure, whiles exploration and development expenditures are capitalized and recovered over 5 years on a straight-line basis, (20% each year) as capital allowance from the date of commencement of production.

Ghana guarantees a stable political environment with well-defined maritime boundaries, regulatory framework, and availability of support infrastructure amongst others.

GOIL Upstream’s overview of investor roadmap revolves around the following;

Open door policy including negotiations with potential partners
Execution of non-disclosure agreement, confidentiality clause and legal framework
DWCTP Block opportunity space overview through group participation in conferences/ presentations
Physical or Virtual Data room visits
Partnership structure, negotiations and transaction process
Publication of articles in Oil & Gas Magazines or Periodicals.

These are step aimed to be conducted in agreement with our relevant stakeholders, Ghana National Petroleum Corporation (GNPC), Petroleum Commission (PC) and Ministry of Energy (MOE).