AGC is the ‘Agence de Gestion et de Cooperation entre la Guinee-Bissau et le Senegal’ which is a joint commission set up by the governments of Guinea-Bissau and Senegal to administer the maritime zone between the two countries. The AGC Profond block consists of the deepwater portions of two blocks previously known as Cheval Marin and Croix du Sud. The block covers an area of 9,838km2 and is located in water depths ranging from approximately 50 to 3,500m.
The Group has an 88%(1) beneficial interest and 100%(1) paying interest in the block during exploration with the state owned entity AGC Entreprise holding a 12% beneficial interest and having a right to back-in for a further 5% beneficial interest following a declaration of commerciality.
The first exploration period commenced on 19 September 2006 and lasts for three years. The initial exploration period carries a commitment to review legacy seismic data (of which there is a considerable amount) and acquire an SBL survey. An extension of a further two years is possible by relinquishing 25% of the block and drilling one exploration well to a minimum depth of 1,500m. A second extension with similar commitments is also possible.
The block is well known to the Group as several of the staff were involved in the licences related to Cheval Marin and Croix du Sud (now expired), when they were employed by Fusion Oil & Gas plc which was involved in both areas. Management believes that the prospectivity of the area has been enhanced by the amalgamation of the two previous licenses into one and that an improvement in both fiscal terms and oil price has now made it economically more viable to drill.
(1)The Group has entered into an agreement with Rocksource SA whereby the latter may acquire an interest of up to 25% by paying 100% of the cost to acquire a CSEM survey and a promoted contribution to the first two exploration wells.