Sunset Pacific Petroleum Ltd.

- An oil & gas exploration stage company          TSX-V: SPK

 

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Projects:

  • A) Royalty Interests – Bougie Trutch and Trutch East.

  • B) Partnership evaluating and acquiring several near term production and high impact exploration projects in the Middle East and North Africa.

  • C) Onshore block in The Sultanate of Oman.

  • D) Oil and gas concession in Oman.

  • E) Ben Khedechef concession in Tunisia (previously named El Hamra). The Ben Khedechef concession is an onshore oil & gas exploration block in Central Tunisia which has been the subject of interest of late. The concession is immediately proximal Mazariane Energy's ordovician discovery well of 4,300 bopd, 13.4 million standard cubic feet per day gas which recently prompted the Carlyle Group to invest $US500 million.

  • F) Hydro-carbon Concession in Tunisia.

Source of project overviews (seen below) is from the Company's August 29, 2018 Management Discussion & Analysis of Financial Position and Results of Operation.

 

RESOURCE PROPERTIES
 

Oil and natural gas properties
 

A) Royalty Interests – Bougie Trutch and Trutch East
 

On October 14, 2005 the Company acquired a 2.5% overriding royalty in the Bougie Trutch oil and gas project in North Eastern British Columbia for $29,000 paid for by the issuance of 100,000 common shares at $0.29 per share on November 17, 2005. A total of 5 halfway wells have been drilled on this property. Production from two wells commenced in February 2007 and the production from the third well started in January 2008. The forth well is shut in and the fifth well was plugged and abandoned in the year ended December 31, 2009. Our royalty interest in the remaining proven reserves from the three producing wells as at December 31, 2015 is estimated at .743MMcf.of natural gas and 3.5 Mbbl of natural gas liquids.
 

On November 30, 2006 the Company acquired a 2.5% over-riding royalty in the Trutch East natural gas lease package (15 square miles) for cash of $250,000. The property has one producing well. The production commenced in February 2007. Our royalty interest in the remaining proven reserves from this well as at December 31, 2015 is estimated at .743MMcf. of natural gas and 3.5 Mbbl of natural gas liquids.
 

A re-evaluation of the Bougie Trutch and Trutch East properties as at December 31, 2016 resulted in a write down of $9,600 (2015:6,000) which is included in write down of oil and gas properties on the consolidated statement of operations and comprehensive loss.
 

During the year ended December 31, 2017, the Company wrote off $9,400 (2016: $9,600) which is included in write down of oil and gas properties on the consolidated statement of operations and comprehensive loss.
 

No royalties were received during the year ended December 31, 2017


PROPOSED TRANSACTION

 

B) Partnership evaluating and acquiring several near term production and high impact exploration projects in the Middle East and North Africa: On June 2, 2014 the Company announced that it has signed a memorandum of understanding ("MOU") with IMI and COTIF SICAR (investment arm of the CARTE group) both headquartered in Tunisia. The MOU outlines an equal partnership between the parties in evaluating and acquiring several near term production and high impact exploration projects in the Middle East and North Africa ("MENA") region.
 

The IMI-EAG group, established in 1974 and headquartered in Tunisia has over 60 companies throughout the world including the USA, Canada, the Philippines, Thailand, Maylasia, Papua New Guinea, Algeria, Morocco, Egypt, Chad, Cameroon, Angola, Qatar, Bahrain, Dubai, Abu Dhabi and Saudi Arabia. IMI-EAG is a global leader in technical assistance and has been committed to offering the world-class oil and gas construction services in the fields of mechanics, electricity, civil works, and field development from commissioning to start-up and operations to maintenance. Currently, IMI-EAG has more than 400 core employees and up to 1500 skilled engineering and trades contractors at any given time, adhering to the highest standards of quality, transparency and international qualifications.
 

CARTE (C.A.R.T.E - Compagnie d'Assurances et de Réassurances Tuniso-Européenne ) was founded in 1976 by BNP (now BNP Paribas) and DOGHRI Group and in partnership with FGM and Préservatrice. In 1986, under the leadership of its current CEO , Mr. Hassine Doghri, the DOGHRI Group in partnership with Mutual of Le Mans took control CARTE. Today, with over 35 years of experience, CARTE is a leader in the Tunisian insurance sector. Mr. Doghri has served as the honorary general consul for the Norwegian consulate in Tunis since 1982 Tunisian British Chamber of Commerce since 2010. CARTE holds strategic partnerships with both local and foreign partners, investing in various sectors.
 

On November 3, 2014 the Company announced that it had signed a memorandum of understanding with Hoqool Petroleum International WLL Co., based in Manama, Kingdom of Bahrain. The MOU outlines an equal partnership between the parties in evaluating and acquiring near-term production and high-impact exploration projects in the Middle East and North Africa region.
 

Hoqool Petroleum International is an independent oil and gas exploration and production company, incorporated and headquartered in the Kingdom of Bahrain. The founding management team comprises senior energy executives from the national oil companies of Bahrain and Saudi Arabia, who are experienced and well recognized, both locally and internationally, covering the upstream sector of oil and gas, with more than 175 years of combined experience. The company was established in 2010 and represents a consortium of three Arabian Gulf firms that have long years of experience in the most prolific and richest petroleum system in the world. The core business of Hoqool is the development of energy resources; its activities include exploration and development of oil and gas fields.
 

The Company has now applied for two open exploration permits with the Tunisien Direction Generale de l'Energie. The first open permit was applied for on July 31, 2014, where the company has partnered on an equal basis with two established Tunisian companies, namely IMI and COTIF-SICAR (investment arm of the CARTE group). The second open permit was applied for on Oct. 30, 2014, where the company will partner with Bahrain-based oil company, Hoqool Petroleum International WLL Co. Both open permits meet the company's criteria of near-term production potential, with good seismic quality and previously drilled wells along with nearby proven production. The Company is now waiting for the Tunisian government on final approvals for both permits.
 

 
C) Onshore block in The Sultanate of Oman:
On March 23, 2015 the Company announced that it has entered into a non-binding letter of intent (“LOI”) to acquire a 56.25% participating interest in an existing exploration and production sharing agreement for an onshore block in The Sultanate of Oman (the “Oman Block”), with the current block holder owning an 18.75% participating interest and the Sultanate of Oman owning the remaining 25% participating interest in the property. (As required under the terms of the exploration and sharing agreement, the Oman government is carried in the exploration phase.) Sunset will be the operator of the Oman Block. Pursuant to the terms of the LOI, Sunset will pay the current block holder US$100,000 within 30 days after signing the LOI. A finder’s fee may be payable with respect to this transaction. The parties are now working to finalize the necessary formal agreements as soon as practicable.
 

 
D) Oil and gas concession in Oman:
On February 23, 2016, The Company announced that it has signed a conditional agreement to acquire an oil and gas concession in Oman subject to certain conditions being met over the course of the next two months. The Company has paid the vendor a lock-up fee of US$50,000. The parties are conducting final due diligence and negotiating and finalizing an operating agreement which they expect to complete by the end of May 2016. As at the date of this report, this agreement has not been finalized.
 

 

E) Ben Khedechef concession in Tunisia (previously named El Hamra): On May 9, 2016, The Company announced that is has been awarded the Ben Khedechef concession in Tunisia (previously named El Hamra). The final details will be reviewed by the Government of Tunisia Etap/DGE and the Company’s representatives in Tunisia.
 

 
F) Hydro-carbon Concession in Tunisia:
On April 26, 2017 the Company announced that it has signed an agreement to farm out a fifty (50%) percent working interest in its interest in a hydro-carbon Concession in Tunisia. The conditions of the Agreement call for Sunset to receive approval from the government of Tunisia for this Agreement. The Agreement also calls for Sunset to receive all government approvals to proceed to a work program on the concession. The farmee will provide A SWIFT coded Letter of Credit for the sum of Five Million United States (USD $5,000,000) Dollars with the term of five years, that must be approved by the government of Tunisia’s confirming bank. Pursuant to the Agreement, the farmee will pay: (a) to Sunset the sum of Two Million United States (USD $2,000,000) Dollars in sunk cost on or before thirty (30) days after the execution of the Agreement. (b) the sum of One Million United States (USD $1,000,000) Dollars toward the administrative and operational costs of the Concession and (c) fifty (50%) percent of any additional cost related to the Concession. The Company will provide further disclosure of this transaction including the name of the farmee when all conditions by all parties have been met. This Agreement is subject to regulatory and government approvals where required.
 

On May 25, 2017 The Company announced that it has renegotiated the agreement with its farmout partner for a 50-per-cent working interest in its interest in a hydrocarbon concession in Tunisia. The conditions of the agreement call for Sunset to receive approval from the government of Tunisia for this agreement. The agreement also calls for Sunset to receive all government approvals to proceed to a work program on the concession.
 

The farmee will provide a Swift-coded letter of credit for the sum of $5-million (U.S.) with the term of five years, that must be approved by the government of Tunisia's confirming bank. Pursuant to the agreement, the farmee will pay:

  • To Sunset the sum of $2-million (U.S.) in sunk cost on or before 60 days after Sunset has received all approvals from the government of Tunisia;

  • The sum of $1-million (U.S.) toward the administrative and operational costs of the concession after Sunset has received all approvals from the government of Tunisia;

  • 50 per cent of any additional cost related to the concession.

Sunset will provide further disclosure of this transaction, including the name of the farmee, when all conditions by all parties have been met. This agreement is subject to regulatory and government approvals, where required.

 

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