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(11) Extendable by another five years subject to newly negotiated terms and conditions.
(12) The Block 5 licence will expire 8 June 2015, but as a result of lost production days due to the security situation in Yemen, the Group is
seeking to extend the Block 5 commitment period for 541 days (until 1 December 2016), according to the terms of the licence. Although
discussions are ongoing with the Yemeni government, the Group is still awaiting a final confirmation. The Group is also seeking to obtain
approval from the Yemeni government for an additional 5-year extension of the licence.
(13) The JV partners have approved to extend this licence for an additional year until July 2015 and are in the process of requesting this
extension from the Ministry of Oil and Mineral Resources.
(14) Medco LLC is currently awaiting approval of the renewal of the service contract for a second 10-year period, until August 2026, from the
Minister of Oil and Gas.
(15) Cost recovery is not applicable in respect of exploration, development or operating costs incurred relating to assets governed by royalty and
tax regimes.
(16) The operator, New Horizon Exploration and Production Ltd., has applied for a one-year extension.
In order to focus on the core MENA region, the Group is actively seeking to exit all jurisdictions save for Egypt, Iraq,
Yemen and Oman.
Planned capital expenditure and near-term exploration and appraisal programmes
As at 1 June 2014, the Group’s exploration and development capital expenditures to satisfy the current terms of its
licences are expected to be $199.9 million for the remainder of 2014, including $21.2 million on exploration and
appraisal work and $178.7 million on development. The Group’s 2014 capital expenditure programme focuses on the
Siba gas development programme, which accounts for $156.6 million of this total. Overall, the 2014 capital expenditure
programme is expected to fund 48 development wells, 5 appraisal wells and 5 exploration wells and 23 capital
workovers across the Group. In addition, the planned programme will fund significant processing and transportation
facilities, as well as seismic data acquisition, for Siba, as well as the Group’s minimum capital expenditures in
Mansuriya and significant exploration work in Block 9 in Iraq. The Group’s exploration and development capital
expenditures to satisfy the current terms of its licences are expected to be $140.3 million in 2015 and $37.5 million in
2016, again focusing on gas development in Siba in an amount currently estimated at $100.1 million in 2015 and $28.1
million in 2016.
For details of the planned exploration, appraisal and development programme in each jurisdiction, see the description of
each asset’s licence terms under the section entitled “—
The Group’s operations.
”
The most significant elements of the Group’s 2014-2016 exploration and appraisal programme are as follows:
Iraq – Block 9, at a projected cost of $18.5 million in the remainder of 2014 for one exploration well and
demining operations, and a total of a further $34.2 million in 2015 and 2016 for seismic, appraisal drilling and
other exploration work;
Yemen – Block 82, at a projected cost of $1.0 million in the remainder of 2014 for seismic interpretation and a
further $10.2 million in 2015 and 2016 for three exploration wells; and
Egypt – Area A at a projected cost of $1.8 million in the remainder of 2014 for one exploration well.
The most significant elements of the Group’s 2014-2016 development programme is as follows:
Iraq – Siba, including major gas development programme, with an estimated drilling and facility capital
expenditure total of $156.6 million in the remainder of 2014 and a further $129.2 million in 2015 and 2016 to
complete the gas processing work;
Iraq – Mansuriya, representing minimum capital expenditures, with an estimated capital expenditure of $22.1
million in the remainder of 2014; and
Egypt – Area A, including drilling of four development wells with an estimated capital expenditure total of $5.2
million over 2015 and 2016.
As at 1 June 2014, the Group expects to incur total exploration and development capital expenditures through the end of
2016 of $377.6 million, of which substantially all is capital expected to be committed under the terms of its licences
