Corcel, the extractive industries exploration and development company, with interests across battery metals and oil and gas, has announced that it has signed its first oil and gas acquisition with the purchase of a 90% interest in Atlas Petroleum Exploration Worldwide Limited (“APEX”), that has working interests in several historically producing oil assets in the Kwanza Basin, onshore Angola. 

Corcel has acquired a 90% interest in APEX, a privately owned company domiciled in the BVI, for £800,000 settled via the issuance of 200,000,000 new ordinary shares, priced at £0.004 per share (the “Consideration Shares”). The Consideration Shares are locked up for 18 months post issuance. Existing APEX shareholders will retain a 10% interest in the company and will be carried by Corcel through first oil on the KON-11, KON-12 and KON-16 blocks.  

Completion of the transaction is contingent upon the formal execution of three Risk Service Contracts (“RSCs”) covering the KON 11/12/16 blocks, with the Angolan government, expected later this week. The terms of the RSCs include an initial exploration phase of 5 years, with a subsequent exploration phase of 2 years and a base production period of 20 years. The minimum spend on the blocks are US$6m on KON-11 and KON-12 and US$3m on KON-16, with commitments to drill one well on all three blocks. As part of the transaction, the vendors have agreed to provide any guarantees should they be required by government. Further announcements on completion will be made as appropriate.  

Consistent with APEX’s obligation with the Angolan government to develop the capabilities of and strengthen local exploration and production companies, the Company has also signed an agreement with a local exploration and production company to buy this entity out of an internal consortium agreement with APEX, whereby they would otherwise have had entitlement to 25% of the APEX position in these three licenses, and would also have entitlement to certain cash payments. This buy-out agreement involves Corcel issuing 28,240,839 new ordinary shares (the “Buy-Out Shares”) and paying US$225,000 cash expected to be utilized towards the local exploration and production company’s operations. The shares will be locked in for 18 months.

APEX Portfolio Overview:

The APEX portfolio is located onshore Angola, and consists of interests in three licences:

• KON – 11 Non-Operated – 12 historical wells (20% working interest – 18% net to CRCL)
• KON – 12 Non-Operated – 8 historical wells (25% working interest – 22.5% net to CRCL)
• KON – 16 Operated – 1 historical well (35% working interest – 31.5% net to CRCL)

KON-11 and KON-12 are considered brownfield development opportunities and include the historically producing Tobias and Galinda fields, both drilled and developed in the 1960s and 1970s by Petrofina, with combined historic production over 30 MMbbls. Both licences are operated by Sonangol (the Angolan national oil company).

APEX’s total reported unproduced contingent oil resources are estimated at:

• KON-11 – 65 MMbbls, 11.7 MMbls net to CRCL
• KON-12 – 19 MMbbls, 4.28 MMbls net to CRCL

All three blocks have significant post and pre-salt prospective resources, both stratigraphic and structural with APEX estimating Prospective Resources of:

• Post-salt 456 MMbbls – unrisked P50 (138 MMbo risked), 81.1 MMbls net to CRCL
• Pre-salt 1,029 MMbbls – unrisked P50 (223 MMbo risked), 215.9 MMbls net to CRCL

Both the Tobias (KON-11) and Galinda (KON-12) fields were discovered and originally developed in the 1960s. Both reservoirs are in the Binga limestone with 4-14% porosity and located at 700m and 1,900m respectively. Peak production at Tobias was approximately 17,500 bbls/d and at Galinda was approximately 2,700 bbls/d. Historic total production, which started in 1960 and ceased in the early ’80s, was 29MMbbls and 2.8MMbbls respectively. APEX and Corcel believe that significant recoverable volumes of oil remain in place at both locations and initial plans may include additional seismic work to firm up drill locations, as well as a combination of vertical and horizontal wells. The development plan envisioned for KON-11/12/16 qualify for marginal field fiscal terms, as outlined by the Angolan government, resulting in advantageous royalty, tax and depreciation regimes.   

The Company estimates an initial funding requirement below US$1M to secure the three RSCs which includes US$800k of pre-negotiated signature bonuses. The Company is fully funded, post the recent partial sale of Mt Weld and the vendor placing, for this requirement. 

APEX has net assets of approximately $15,000 and did not trade in the year ended 30 September 2022. 

The Company also notes recent announcements by TotalEnergies to develop the offshore component of the Kwanza basin.

Corcel Executive Chairman, James Parsons, commented:
“I am delighted to announce this first acquisition in our oil and gas strategy, providing a strong initial platform on which to progress our pan-Angola/Brazil growth strategy. The metrics on this acquisition are compelling for Corcel shareholders and the window is now open for rapid further consolidation onshore Angola alongside new asset acquisitions in Brazil. I look forward to being in Angola later this week with our partners for the licence signature and award ceremonies.

The Kwanza basin has been producing for 35 years, is a well understood petroleum system and has both significant scale and upside. Corcel sees significant opportunities to increase the legacy operator estimated resources given the structural configuration of the basin and recent new structural mapping. We also see large stratigraphic and structural pre salt structures on blocks, analogous to the offshore Cameia discovery. Our initial focus will however be on quickly securing first oil and revenues through our redevelopment opportunities.”