UNITED REEF LIMITED

PROJECTS

Contact us

Tel: 416-368-3332

Email: info@unitedreef.com

Listed TSXV

PROJECTS >

Oil & Gas Project - Central African Republic
(project subject to force majeure)

United Reef obtained the right, through an agreement in September, 2004, to earn a 25% interest in 55,504 km2 of oil and gas rights in the Central African Republic (CAR). The oil and gas rights are held by RSM Production Corporation (RSM), an independent U.S. oil and gas producer.

  • United Reef can earn its interest by funding 50% of the costs to obtain 2,000km of new 2D seismic and participate in drilling a minimum of 8 test wells.
  • The Company engaged independent consultants in 2004 to carry out a due diligence review of the existing seismic and other available data RSM compiled on their CAR license: a) independent risk analysis (October 2004) indicates an approximate 25% probability of geological success and an approximate 23% probability of economic success (at $30/bbl); b) NI 51-101 compliant report received December 2004.
Regional Producing Oil Fields
Regional Producing Oil Fields view

License status - Force Majeure

  • RSM declared force majeure under the terms of their agreement with CAR in April 2003 as a result of civil unrest in the country which began in 2001. A coup took place in CAR in March 2003 and a transitional government was formed shortly thereafter. The transitional government acknowledged to RSM in November 2003 that events of force majeure had occurred in the country following the issuance of RSM’s licence. A democratically elected government was formed in CAR in June 2005.
  • RSM and the Company made numerous attempts between 2004-2006 to advance the project and resolve the status of RSM’s force majeure issue without success. The key issue being the CAR government’s failure to acknowledge suspension of RSM’s contract due to force majeure. In January 2007 RSM advised the Company that its application to the International Center for Settlement of Investment Disputes (ICSID), an agency of the World Bank, requesting arbitration of the dispute with CAR was formally registered and a case number was assigned to the request. In May 2008 ICSID reported that a three member arbitration tribunal had been appointed and that the tribunal was constituted to review the arbitration request.
  • Until there is a resolution of these matters, the Company is unable to determine when or if it will be able to participate in the project. The Company’s interest in the project is carried at nominal value.
  • United Reef’s management believes the RSM license has excellent potential for the discovery of hydrocarbons and continues to monitor the RSM/CAR situation.

License description

  • Exclusive oil and gas license granted by the Central African Republic to RSM Production Corporation (RSM), a Denver, Colorado-based private company, in November 2000.
  • License covers 55,504 square kilometres (13,715,000 acres) along the Chad-CAR border.
  • Royalties are 12.5% for oil and 5.0% for natural gas.
Regional Producing Oil Fields
Location of the RSM Oil & Gas License, Central African Republic view

Hydrocarbon potential of the RSM license

  • Exploration activity within the Central African rift subsystem basins was initiated by Conoco in 1969. Other majors who are or have been active in the area include Shell, Chevron, Exxon CNPC, Petronas and ONGC.
  • Two large sedimentary basins, the Doseo and the Salamat, straddle the Chad-CAR border within the licensed area.
  • Both basins are part of the West and Central African Rift System (WCARS), which hosts several other producing basins including: Doba (Chad), +1 BBO and Muglad (Sudan), +1 BBO
  • The RSM license acreage covers the southern flank of the Doseo Basin and a large portion of the Salamat basin. Both basins are relatively unexplored but are known to contain significant hydrocarbon accumulations.
  • Reprocessing by RSM of over 3,600 line kilometres of historic 2D seismic data acquired from Conoco and Exxon has revealed numerous potentially drillable prospects in the Doseo and Salamat Basins.
  • Future oil produced in the CAR could potentially be exported through the Chad-Cameroon pipeline completed in 2003.
Regional Producing Oil Fields
Basins of the West & Central African Rift System view

Doseo basin

  • Straddles Chad-CAR border.
  • 480 km by 90 km (28,000 km²) of which approx. 6,000 km² of the basin lies on the CAR side of the border within the license area.
  • 3 significant oil discoveries drilled by Exxon in the mid-1980’s on the Chad side of the basin (within 40 km of RSM’s license acreage).
  • Limited seismic data (1980’s) over the Doseo Basin in CAR indicates several major structural traps which could each host hydrocarbons.

Salamat basin

  • Over 50% of the basin is within CAR.
  • 300 km by 60 km (12,500 km²) of which approx. 7,000 km² of the basin lies on the CAR side of the border.
  • Significant 1980’s seismic coverage, which has been reprocessed to reveal 18 defined prospects ranging in size from 200 to 6,500 ha.
  • Esso drilled the only well within the CAR, Aoukale #1, in 1986. The well was drilled to 2,476 metres and encountered numerous oil shows (from 2,380 to 5,010 ft) within a predominantly sand section (encountered 19 sandstone units avg/150 ft). A hydrocarbon analysis suggested that the oils may have migrated through the area without being trapped.

United Reef's previous CAR experience

  • United Reef actively worked in the country between 1992 and 2001.
  • The Company gained considerable operating experience in the CAR, which began in 1992 through an option to earn an interest in an alluvial diamond project. The diamond project advanced through several stages of exploration and small-scale production and was closed in early 1998.
  • United Reef also identified and successfully obtained a license to explore a 2,000 km² gold concession. This property is being actively developed by AXMIN Inc. (AXM-TSXV) who released a feasibility study on the project in April, 2008 and remains subject to a 2% Net Smelter Royalty payable to United Reef.
PRINT THIS PAGE

Corporate Office: 120 Eglinton Avenue East, Suite 1000, Toronto, Ontario M4P 1E2 Telephone: 416-368-3332 Facsimile: 416-322-2877