The 1200sq.km Nkembe block has 2C reserves of 20 million barrels of oil at the Loba oil field in the Nkembe block and is close to many producing blocks, a number of which are run by Total, the nation's biggest producer, with an 85-year history there. 

 

Pura Vida has an 80% interest and the state of Gabon 20% in a production sharing contract. 

 

Add will provide well planning and design work, a contracting strategy and project management services in return for first right of refusal to provide drilling management services for the first two Nkembe wells. 

 

Subject to receiving any required approvals Add will also prepare a plan to complete an extended well test on the Loba discovery in Nkembe. 

 

This will aid further development planning and financing. 

 

If Pura Vida or a third party farminee drill Nkembe and hire another firm to provide drill services, the Australian junior will pay Add a break fee of $150,000. 

 

Havoc will complete 3D seismic reprocessing, interpret new and existing seismic data, complete deep structure mapping, optimise well locations and provide resource updates for Nkembe; this initial phase will include liaising with Gabon authorities and working with Add on well planning. 

 

Pura Vida will provide only minor reimbursable expenses for this work to either party. 

 

Once the initial work phase is completed Havoc may exercise its option, which expires April 1 next year, to acquire a 40% interest in Nkembe by spending US$25 million (A$31.8 million) to appraise the Loba discovery and test the Loba Deep prospect. 

 

Havoc can increase its interest to 80% by entering the second exploration phase under the Nkembe production sharing contract by spending another $15 million. 

 

If Havoc doesn't farm-in and Pura Vida still secures funding to drill the first well Havoc has the option to earn a 15% working interest in return for its previous services. 

 

Pura Vida is required to pay Havoc a break fee of $150,000 in certain circumstances. 

 

Pura Vida chairman Simon Eley said that this work phase by Add and Havoc will result in the Loba appraisal and the Loba Deep exploration well being drilled next year. 

 

"Aside from some minor reimbursements this is a no cost option for Pura Vida to add value to the project and potentially secure a farm-in partner willing to commit up to $40 million for an 80% interest in the project," he said.

 

He added that Pura Vida was excited to be working with experienced teams like Add and Havoc and that the company "looked forward to maximising the opportunity alongside them".