Tunisia/Italy - Sicily Channel
In April 2008, Kairiki signed a Letter of Intent agreement to ("LOI") acquire a 30% interest in two contiguous offshore Exploration Permits, G.R.15 PU in Italian Waters and Kerkouane in Tunisian Waters, from AuDAX Resources Limited.
G.R.15 PU, is located offshore the island of Pantelleria southwest of Sicily in Italian waters and the Kerkouane Permit is located offshore northeast Tunisia (see figure below).
Kairiki will acquire interests in these Permits as part of its Area of Mutual Interest ("AMI") agreement with AuDAX. These two Permits strategically provide full access to the highly significant Sambuca prospect both sides of the Tunisian-Italian maritime border as well as to the Dougga gas/condensate discovery.
G.R.15 PU - Pantelleria Permit (665km2, Italian waters):
30% interest (subject to completion)
Operator: Audax Resources Limited
Previous exploration work has identified a number of prospective targets, the standout being the drill-ready Sambuca prospect with a large resource potential. AuDAX as Operator has previously announced that the Sambuca Prospect may contain prospective recoverable resources of up to 230 million barrels of oil equivalent. Though largely lying within the Pantelleria Permit, the Sambuca structure extends into the contiguous Kerkouane Permit across the Italian-Tunisian maritime border. The Joint Venture plans to mature the remaining inventory over the coming few months. The forward work program requires completing the tendering process for an offshore drill rig and receiving environmental approvals for offshore drilling.
Kerkouane Permit (3847km2, Tunisian waters):
30% interest (subject to completion)
Operator: Audax Resources Limited
In addition to the extension of the Sambuca structure the Kerkouane Permit contains the Dougga gas/condensate field, discovered by Shell in the early 1980's. The Dougga Field lies immediately north of the Tazerka oilfield, also discovered by Shell in the early 1980's. The operator has previously announced that Dougga is assessed to contain 29 Mmbbls of condensate and 400 BCF of gas. Previous geological and geophysical work has identified several additional exploration leads and prospects within the Permit and a commitment 2D seismic survey will mature the most promising of these. The Joint Venture plans to complete 400 km of 2D seismic acquisition and spud one well prior to Permit expiry in February 2010.
The completion of these transactions is conditional upon AuDAX completing the acquisition of the Pantelleria and Kerkouane Permits from Grove Energy Limited by 30 June 2008; and a mutually acceptable Sales and Purchase Agreement being executed between Kairiki and AuDAX by 30 June 2008. These transactions are expected to close by 30 June 2008.
Tunisia
Chorbane Permit (2561km2):
50% interest (subject to completion)
Operator: Audax Resources Limited
Chorbane is located onshore in southeast Tunisia and has six prospects and leads identified within four areas of the Permit and are supported by a comprehensive 2D seismic and well data base. The licence commitment requires one well to be drilled before July 2010, and the forward work program will consist of an extensive seismic reprocessing program.
Typical of the area, all prospects are structurally complex with a number of potential reservoirs. The area offers both oil and gas potential, with ready markets and existing nearby infrastructure for both. The main characteristics of the key prospects are set out below:
· The Sidi Daher prospect in the west of the Permit is a robust fault-bounded thrusted closure involving stacking of the Metlaoui and Zebbag carbonate horizons of Tertiary and Cretaceous ages respectively. These reservoirs have proved to be prolific hydrocarbon bearing intervals in neighbouring Permits.
· The Hmid prospect has a mapped closure at both the Metlaoui and Abiod (upper Cretaceous) carbonate levels. The Abiod is a prolific reservoir in several fields in Tunisia. Given the prospect's structural style this reservoir interval is anticipated to be highly fractured in Hmid.
· The Knani prospect is based primarily on the interpreted (but untested) hydrocarbon shows in neighbouring wells in the Reineche (Eocene Carbonate) and Abiod. The mapped closure relies on fault seal.
The completion of these transactions is conditional upon completing the acquisition by 30 June 2008.
Tunisia
Area of Mutual Interest (AMI)
33.33%
In March 2008 Kairiki entered into a Tunisian AMI agreement with two Australian listed entities, AuDAX Resources Ltd and Nexus Energy Limited to explore for oil and gas opportunities in the country. This AMI allows the Parties to pool their respective resources in the search, evaluation and acquisition of oil and gas projects in this area. A variety of projects ranging from production, rejuvenation, development, near field exploration and frontier exploration are to be considered by the Parties.