|By Marketwire .||
|September 21, 2012 07:00 AM EDT||
CALGARY, ALBERTA -- (Marketwire) -- 09/21/12 -- Molopo Energy Limited (ASX:MPO) is pleased to announce that a production right has been awarded to Molopo South Africa Exploration ("Molopo SA") over an area of approximately 200,000 hectares in the Free State province.
This is the first onshore production right to be awarded in South Africa, and commenting on the award, Molopo Manager for South Africa Mr. Peter Price said, "We are very pleased to have secured this first onshore production right, which represents an exciting development for both South Africa and for Molopo. We and our Black Economic Empowerment ("BEE") partners are looking forward to contributing to the enhancement of the local community."
An estimate of Molopo SA's reserves and resources in the Virginia License area was performed during the exploration phase in 2010. At that time, the P1 reserves were estimated at approximately 9.2 Bcf and P2 reserves of approximately 23.0 Bcf, and the production right application was based on this exploration work(1). Molopo's overall net interest in the project is 80% after BEE and government participation.
The initial phase of development of this project will be the tie-in of 4 of the 11 pilot production wells where gas flow of approximately 1.2 mmcf/d continues. Commercialisation of initial volumes of approx. 600 mcf/d of natural gas is anticipated to be through the provision of Compressed Natural Gas for transportation. The timing and detailed scope of these development plans will be finalised over the coming months. However, the capital investment outlined in the production right is approximately A$2.4 million in the first year, A$3.9 million in the second year, and A$8.6 million in the third year; totalling A$14.9 million over the three year period.
In the longer term, the full field development could result in the development of more than 200 wells, depending on success in further delineation of the resource as well as progress on gas commercialisation opportunities.
(1)These reserves were independently certified by Tim Hower of MHA Petroleum Consultants, LLC, Denver USA who has consented to the inclusion of the reserves information in the form and context in which it appears.
Molopo SA has committed to the implementation of a social and labour plan to be reviewed after two years to ensure that it remains in line with local economic development program developed for the region. Molopo will continue to contribute to the Upstream Training Trust to assist with the development of local skills to the benefit of the onshore gas industry. Molopo SA was assisted by Bowman Gilfillan in the preparation of the production right application.
This press release contains certain forward-looking statements. These statements relate to future events or future performance of the Company. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "predict", "seek", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company's current views with respect to certain events, and are subject to a number of risks, uncertainties and assumptions. Many factors could cause Molopo's actual results, performance, or achievements to materially differ from those described in this press release. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in other public disclosures made by the Company or this press release as intended, planned, anticipated, believed, estimated, or expected. Furthermore, statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be produced profitably in the future. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary declaration. These statements speak only as of the date of this press release. The Company does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
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Issued by: Molopo Energy Limited
Molopo Energy Limited is an ASX-listed oil and gas exploration and production company. The company is focussed on the development of its shale oil resource play in the Permian Basin, Texas, USA. The company also has unconventional oil assets in the Williston Basin, Saskatchewan, Canada, shale gas assets in Quebec, Canada, a CBM project in Australia (under divestment) and onshore gas projects in South Africa.
Molopo Energy Limited
VP Capital Markets
403.648.8026 / +61 3 9618 8704 (Australia local)