Caracal Energy has completed a farm-in agreement with GlencoreXstrata for the development of the Badila and Mangara oil fields in Chad.
Under the agreement, Glencore acquires 25% working interest in the Badila and Mangara Exclusive Exploitation Authorizations (EXAs), while Caracal Energy will retain 50% working interest.
Glencore will fund up to $100m per year to develop the Badila and Mangara oil fields for Caracal Energy’s working interest and will also fund the development costs for three years.
Under a separate agreement between Société des Hydrocarbures du Tchad (SHT), Glencore has acquired another 10% working interest in the EXAs. SHT retains the remaining 15% working interest.
As per the terms of the EXAs, Caracal Energy and Glencore are required to fund SHT’s costs, which are reimbursed through cost oil.
Caracal Energy chief executive officer Gary Guidry said the deal with Glencore will play an important role in the development of the assets in Chad.
"We have been working with Glencore on this transaction since July 2012 and we look forward to continuing the partnership as we drive the project towards first oil production within the next few weeks," Guidry added.