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Cap Energy Ltd (CAPP)

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Thursday 07 March, 2013

Cap Energy Ltd

Acquisition of Interests in Guinea-Bissau

                                                                                                7 March 2013

                                             CAP ENERGY LIMITED
                                          ("Cap" or the "Company")

                                  Acquisition of Interests in Guinea-Bissau

Cap  Energy  Limited, a company listed on the ISDX Growth Market focused on upstream oil and gas exploration
in  sub-Saharan  Africa,  is pleased to announce that it has acquired its first asset  since  the  Company's
restructuring  in 2012 by entering into an agreement to acquire a majority shareholding in a  company  which
holds interests in two offshore Guinea-Bissau exploration licences.

Acquisition of Interests in Guinea-Bissau

On  28 February 2013, Cap agreed to acquire shares ("Shares") in Sphere Petroleum Corporation (BVI) ("Sphere
BVI"), a company which holds interests in two oil and gas exploration licences offshore Guinea-Bissau.   The
Shares  were  acquired from Sphere Petroleum QSC ("Sphere"), which has retained a minority  shareholding  of
approximately 14% in Sphere BVI. The licences relate to Block 1 (Corvina) and Block 5B (Becuda).  Completion
of  the  acquisition is subject to certain conditions being satisfied by Sphere, however it is  expected  to
take place by 31 March 2013 ("Completion").

Block 1 (Corvina)

The Block 1 licence area covers 4,800 square kilometers offshore Guinea-Bissau in shallow waters ranging  up
to  100  metres  and  is  located  directly west of the billion barrel Dome Flore  discovery  in  the  Joint
Administration  Zone  ("AGC")  between Guinea Bissau and Senegal, and north of  Svenska  Petroleum's  Sinapa
discovery  which has an OIP P50 estimate of 240 mmbbls. 23 known salt domes exist south of  the  Dome  Flore
discovery and historical well DRO-1 drilled in Block 1 identified structural traps formed by salt diapirs.

Block  1 is geologically analogous to the Dome Flore and Sinapa discoveries and the regional studies carried
out by Sphere, including the correlations with 14 wells drilled in the region, indicate the likelihood of an
existing petroleum system.

Sphere's reinterpretation of historic seismic has already identified 9 leads in Block 1. The acquisition  of
1,500  square  kilometers of new 2D seismic data will be undertaken shortly by the  licence  operator,  Lime
Petroleum  Guinea-Bissau  ("Lime"). Cap expects that the new data will confirm  the  attractiveness  of  the
block,  giving  the opportunity for a more precise quantification of the possible hydrocarbon resources.  An
update on the resource prospectivity of Block 1 is expected by Q2 2013.

Sphere  BVI  has  a  35%  cost interest and a 28% equity interest in Block 1 pursuant  to  a  joint  venture
agreement  with  Empresa  Nacional de Pesquisa e Exploracao Petroliferas, E.P. ("Petroguin"),  the  national
petroleum  company of The Republic of Guinea-Bissau, and Lime. Under the joint venture agreement,  Petroguin
has  a  0%  cost interest and a 20% equity interest in Block 1 and Lime has a 65% cost interest  and  a  52%
equity interest in Block 1.

Block 5B (Becuda)

The  Block  5B  licence area covers 5,500 square kilometers offshore Guinea-Bissau in water  depths  ranging
between  200  -  4,000  metres.  Historic 2D seismic data indicates  large  leads  in  potential  Cretaceous
reservoirs.  The  operator,  Lime,  is  currently evaluating new 2D  seismic  results  in  addition  to  the
reprocessing of historic 2D data. An update on resource prospectivity in Block 5B is expected by Q3 2013.

In  respect of Block 5B, Sphere BVI has a 35% cost interest and a 31.5% equity interest, also pursuant to  a
joint  venture agreement with Petroguin and Lime. Petroguin has a 0% cost interest and a 10% equity interest
in Block 5B and Lime has a 65% cost interest and a 58.5 % equity interest in Block 5B.


The  initial consideration for the acquisition of the Shares was USD100,000 which was satisfied in cash from
the Company's existing resources. Further consideration of USD0.5 million will be payable by the Company  on
Completion  and  a further USD 0.5 million will be paid on or prior to 30 June 2013.  In addition,  Cap  has
agreed, in due course, to settle Sphere's share of historic costs incurred in respect of the licences, up to
a  maximum  of approximately USD1.9 million, as well as a certain percentage of interest costs  relating  to
Sphere BVI's ongoing obligations in respect of the licences.

The  additional consideration is expected to be satisfied from loans made to Cap by certain Directors of the
Company. Further details of these loans will be announced at Completion.

Tim Hearley, Cap's Chairman, commented: "This acquisition in Guinea-Bissau marks a significant first step in
achieving  our strategic objectives. We are very pleased with this development and are on track  to  further
broaden our presence in the sub-Saharan region as we expand our portfolio."

The Directors of Cap Energy Limited are responsible for the contents of this announcement.

For further information please contact:

Tim Hearley, Chairman
Tel: +44 (0) 7850 390998
Email: [email protected]

Lina Haidar, Chief Executive Officer
Tel: +44 (0) 207 491 9196
Email: [email protected]

Corporate Adviser:
Mark Anwyl and Duncan Vasey
Peterhouse Corporate Finance Limited
Tel: +44 (0) 20 7220 9796
Email: [email protected]

Public Relations:
Ian Proud Associates
Ian Proud
Tel: + 44 (0) 7956 909418
Email: [email protected]

CAP Energy
25 Dover Street
London W1S 4LX
Tel: +44 (0) 207 491 9196
Email: [email protected]

Cap Energy Ltd

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