Ibhubesi gas project, South Africa

29th April 2016

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

  

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Name and Location
Ibhubesi gas project (IGP), off the Northern Cape coast, South Africa.

Client
Sunbird Energy has acquired a 76% interest in the production right for Block 2A, within which the Ibhubesi gas project is located, from Forest Oil and Anschutz Corporation.

The acquisition enables the ASX-listed company to operate and develop Ibhubesi with South Africa’s national oil company, PetroSA, which will hold the remaining 24%.

Project Description
The IGP is located 380 km north of Cape Town, in Block 2A, which is a production right that covers 5 000 km2. The undeveloped gasfield – the largest in South Africa – has 1P reserves of 210-billion cubic feet (bcf) and 2P reserves of 540 bcf.

Value
The project could cost between R10-billion and R20-billion to implement.

Duration
A final investment decision is expected in 2015, with first gas planned for 2018.

Latest Developments
Sunbird has signed a conditional agreement with a South African consortium to divest of its noncash assets for A$8.5-million.

The assets include a 74% interest in the Mopane, Springbok Flats and Springbok Flat West coal-bed methane projects, as well as its 76% interest in the offshore Ibhubesi gas project.

In 2015, Sunbird signed a gas sales agreement term sheet with utilities provider Eskom for the supply of 30-billion cubic feet a year of gas from Ibhubesi for up to 15 years, with Sunbird describing the agreement as a major step towards the commercialisation of the gasfield at the time.

Sunbird has told shareholders this month that the conditional agreement with the South African consortium, consisting of major shareholders and debt holders, included a cash consideration of A$1-million, the buy-back and cancellation of 55-million existing Sunbird shares and the assignment of Sunbird’s A$4.8-million outstanding debt to the buyer. The transaction was subject to a number of conditions, including shareholder approval.

A general meeting of Sunbird shareholders will be called in late May.

The transaction with the privately-held consortium comes months after an indicative takeover proposal from Glendal Power and Industries for Sunbird was withdrawn.

Glendal in July last year offered Sunbird shareholders A$0.18 a share for their holding in the company, valuing Sunbird at about A$25-million, but the offer was withdrawn in December.

Key Contracts and Suppliers
MHA Petroleum Consultants (field development plan) and WGK (engineering and project management services).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sunbird Energy, tel +61 8 9463 3260, fax +61 8 9462 6630 or email info@sunbirdenergy.com.au.
PetroSA group communications manager Thabo Mabaso, tel +27 21 929 3365 or email thabo.mabaso@petrosa.co.za.
MHA Petroleum Consultants, tel + 303 277 0270 or fax +1 303 277 0267.
WGK director for corporate communications: eastern hemisphere Carolyn Smith, tel +44 1224 851099 or email carolyn.smith@woodgroup.com.

Edited by Creamer Media Reporter

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