CALGARY, ALBERTA--(CCNMatthews - Dec. 23, 2004) -
TG WORLD AND CHINA NATIONAL PETROLEUM CORPORATION ("CNPC") JOINT VENTURE AGREEMENTS FOR TENERE, NIGER, EXPLORATION PROJECT NOW IN FORCE
CNPC UNIT TO BEGIN SEISMIC ACQUISITION IMMEDIATELY
- Niger Government approvals received
- TG World receives CNPCI payment of US $1 million for back costs
- CNPCI Seismic Program to begin immediately; seismic acquisition crew in-country - ready to commence operations
- TG World to be carried for 20% of minimum US $55-million, initial four-year work program
- Work Program contemplates acquisition of a minimum of 1,500 km seismic and drilling of three (3) exploration wells
TG World Energy Corp. (TSX VENTURE:TGE) ("TG") is pleased to announce that the Government of Niger has approved the previously announced Joint Venture arrangements between the China National Petroleum Corporation's subsidiary, CNPC International Tenere Limited (CNPCIT), and TG's wholly owned subsidiary, TG World Petroleum Limited ("TG World"), and TG World has received US $1 million from CNPCIT. With that approval and receipt of the payment confirmed, the Joint Venture arrangements are now effective.
TG World now holds a 20% interest in the CNPCIT-operated Tenere Permit, Niger, and will be carried by CNPCIT for all but minor elements of its 20% share of the Minimum Work Program which contemplates the acquisition of 1500 km of seismic and the drilling of three exploration wells, at an initial estimated cost of US $55 million.
TG World's carried share of the Minimum Work Program will amount to a minimum of US $11 million. Additional seismic exploration may be carried out at CNPCIT's option, but with TG World carried for its 20% participating interest of additional costs.
CNPCIT has advised TG World that a seismic acquisition crew operated by CNPC's geophysical subsidiary, BGP, is in Niger and ready to begin acquiring data immediately.
"This is a very positive development for TG and its shareholders," said TG's CEO Clifford M. James in Calgary. "The joint venture with CNPCIT is now in effect. It opens the door for exploration to commence, and we expect the seismic acquisition phase of the program to begin any day now. TG continues to believe that the Tenere Block presents an exciting, large scale exploration opportunity. We also believe that the risks we have taken to date have been validated by the substantial commitment made by CNPC - a major, world-class oil company - to this deal and this Block. It's an excellent deal for TG".
New CNPCIT - TG World Tenere Joint Venture: Four-year, Minimum USD $55 MM Exploration Program
The Joint Venture arrangements involve a suite of agreements signed among TG World, China National Oil and Gas Exploration and Development Corporation, CNPC International Limited and CNPCIT, pursuant to which TG World now joins CNPCIT (who will act as Operator of the Tenere project) in CNPCIT's Tenere Establishment Agreement and Licence ("Tenere Contract") in the Republic of Niger.
Under this arrangement CNPCIT (80%) and TG World (20%) now share the rights to explore, develop and produce the Tenere Block. CNPCIT will carry 100% (with minor exceptions) of TG World's share of certain agreed expenditures, including project-related G&A costs, through:
- the reprocessing and interpretation of existing seismic data;
- the acquisition, processing and interpretation of at least 1,500 km of new 2D seismic data;
- the drilling of three exploration wells; and
- the acquisition, processing and interpretation of any additional seismic (2D or 3D) that CNPCIT may choose to undertake prior to the completion of the drilling of the second exploration well.
In addition, the agreements provide for TG World to have a pro-rata share of capacity in any export pipeline owned or controlled by CNPCIT, along with the option to participate in any domestic refinery that CNPCIT may choose to build, subject to certain terms and conditions.
TG World will, in turn, be required to repay its carried costs to CNPCIT, without interest, out of future production in the event that the exploration program is successful and the parties develop petroleum reserves on the Tenere Block.
CNPCIT would, however, have the right to withdraw from its agreement to carry TG World's 20% share of costs, as described above, provided that CNPCIT: (a) pays TG World an amount equal to 20% of the work program budget for elements of that work program that remain unperformed at the time of such withdrawal; and (b) transfers, free of charge, CNPCIT's entire 80% interest in the Tenere Contract to TG World and to any prospective new joint venture partners on a pro-rata basis.
Under the terms of the Tenere Contract, CNPCIT and TG World will have almost four years to perform the work program as well as other petroleum operations that they may choose to conduct. The Tenere Contract also provides for the option for two additional three-year terms, each of which would include additional exploration well commitments.
Copies of the various joint venture agreements have been filed on SEDAR and are available at www.SEDAR.com.
Tenere Block
The Tenere contract area is contiguous to the Agadem contract area held by Esso and Petronas, and includes an extension of the rift basin in which Esso has announced oil and gas discoveries in five separate pools, totalling 350 million barrels of equivalent oil.
Agadem Operator Petronas is currently drilling three exploratory wells on behalf of the Esso/Petronas partnership in a program to discover additional oil in order to reach the threshold required for construction of an export development pipeline. The results of this program are expected to be announced shortly, after all three wells have been drilled.
Any future oil discoveries in the Tenere Block could result in the construction of a new, independent oil export pipeline to tie in with existing pipelines in any of Algeria, Libya, Nigeria or the Sudan, if discovered reserves are sufficient; or they could be tied-in in partnership with a potential Esso-Petronas development at Agadem, to link up with the Chad-Cameroon pipeline operated by Esso.
The statements herein that are not historical facts are forward-looking statements. These statements address future events and conditions and so involve inherent risks and uncertainties. Actual results could differ from those currently projected. The various risks associated with the Tenere Block are more fully described in the Corporation's most recent Material Change Report, which was filed on SEDAR on September 7, 2004 and which is available at www.SEDAR.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
TG World Energy Corp. Clifford M. James President & CEO (403) 265-4506 (403) 264-7028 (FAX)
TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
