Africa Energy withdraws from Puntland, Somalia blocks

Africa Energy formerly Horn Petroleum Corp has announced that it has provided notice to the Puntland State of Somalia advising of its intention to withdraw from the January 2007 productions sharing agreements in respect of the Nugaal Block and the Dharoor Block, each made among the Company, the Government of Puntland and Range Resources, effective immediately.

In its notice to the Puntland Petroleum and Minerals Agency, the Company cited the uncertainty of the current political climate in Somalia, especially in respect of the disagreement between the Federal Government of Somalia and the regional government of Puntland, Somalia over the legitimacy of the PSAs, and potential territorial claims on the Nugaal Block, as the principal reasons for its decisions.

Africa Energy had earlier halted exploration activities significantly reducing its activities in its Dharoor and Nugaal PSC areas pending an agreement on the territorial claims.

The company that holds a 60% interest and operatorship in the Dharoor and Nugaal blocks had also halted a planned seismic acquisition campaign in the Dharoor Valley area which would include a regional seismic reconnaissance grid in the previously unexplored eastern portion of the basin as well as prospect specific seismic to delineate a drilling candidate in the western portion of the basin where an active petroleum system was confirmed by the most recent drilling at the Shabeel-1 and Shabeel North-1 locations.

Other than the territorial dispute insecurity had paralyzed oil and exploration in Puntland with many companies holding back activities until a solution is sought.

JV partner Range resources says that given the Company’s focus on its core assets in Trinidad, Puntland is a non-core asset for Range, and Range had no value attributed to it on the balance sheet.

Following its withdrawal the Canadian oil and gas company Africa Energy will continue to focus on its new corporate strategy of aggressively pursuing other upstream oil opportunities in Africa.

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