Under the production sharing contract, Addax will be the operator of the license. The Societe Nationale des Hydrocarbures, the national oil company of Cameroon, holds a back-in right of 30% in case of a development program.
In consideration for its interest in Iroko, Addax is obligated to pay a signature bonus of $3 million and undertake within the first three years a minimum work program valued at $17.5 million, which includes the acquisition of 3D seismic data and the drilling of one well.
The Iroko license area covers an area of 15.75sqkm and lies approximately 30km offshore Cameroon at a water depth of approximately 40 meters.
Jean Claude Gandur, president and CEO of Addax Petroleum, said: We are excited by our exploration potential offshore Cameroon which we believe can deliver near-term value for our shareholders and the country. We are presently drilling our first exploration wells on the Ngosso license area and later in 2008 we plan to drill on Iroko.
