development wells, the front-end engineering design, procurement, installation and commissioning of
offshore production and processing facilities such as FPSO vessels, and also includes engineering
design, procurement, installation and commissioning of subsea, umbilical, riser and flowline systems and
other related transportation infrastructure. The project will become formally sanctioned when the
relevant working interest partners have approved the development plan, including Sonangol and the
Angola Ministry of Petroleum. Typically, following formal project sanction, we will commence the
construction of offshore production facilities, proceed with development drilling and installation of
subsea architecture in order to advance the project towards initial production. With respect to our
Cameia development, we plan to conduct certain development drilling prior to formal project sanction.
A discovery made by the initial exploration well on a prospect does not ensure that we will
ultimately develop or produce hydrocarbons from such prospect or that a project development will be
economically viable or successful. Following a discovery by an initial exploration well, substantial
additional evaluation and analysis, such as the steps described above, will need to be performed prior
to official project sanction and development, including important regulatory approvals. At any time
during the project development life-cycle, we may determine that the project would be uneconomic and
abandon the project, despite the fact that the initial exploration well, or subsequent appraisal or
development wells, discovered hydrocarbons. See ‘‘Risk Factors—Risks Relating to Our Business—Our
discoveries and appraisal and development projects remain subject to varying degrees of additional
evaluation, analysis and partner and regulatory approvals prior to official project sanction and
production.’’
Licenses
Block 9 offshore Angola.
We acquired our license to explore for, develop and produce oil from
Block 9 offshore Angola by executing a Risk Services Agreement (‘‘Block 9 RSA’’) with Sonangol. The
Block 9 RSA governs our 40% working interest in and operatorship of Block 9 offshore Angola and
forms the basis of our exploration, development and production operations on this block. The Block 9
RSA provides for an initial exploration period of four years. On April 3, 2014, the Angola Ministry of
Petroleum published Executive Decree 95/14, which granted us a two-year extension of the initial
exploration phase on Block 9 offshore Angola, which is now scheduled to expire on March 1, 2016, and
an optional exploration period of an additional three years. We do not have contractual rights to sell
natural gas on Block 9, but we have the right to use the natural gas during lease and production
operations. Any stand-alone gas development cannot hinder or impede the development of liquid
hydrocarbons on Block 9. Block 9 is approximately 1 million acres (4,000 square kilometers) in size or
approximately 167 U.S. Gulf of Mexico blocks and is located immediately offshore in the southeastern-
most portion of the Kwanza Basin. Water depth ranges from zero to more than 3,200 feet
(1,000 meters). Sonangol P&P is our partner on Block 9 and holds a 60% working interest. For more
information regarding our Block 9 license, please see ‘‘—Material Agreements—Risk Services
Agreements for Blocks 9 and 21 Offshore Angola.’’
Block 21 offshore Angola.
We acquired our license to explore for, develop and produce oil from
Block 21 offshore Angola by executing a Risk Services Agreement (‘‘Block 21 RSA’’) with Sonangol.
The Block 21 RSA governs our 40% working interest in and operatorship of Block 21 offshore Angola
and forms the basis of our exploration, development and production operations on this block. The
Block 21 RSA provides for an initial exploration period of five years, which is scheduled to expire on
March 1, 2015. We have applied for an extension of the initial exploration period for Block 21 to
enable us to continue our exploration efforts, however, this extension is currently pending approval by
Sonangol and the Angola Ministry of Petroleum. We do not have contractual rights to sell natural gas
on Block 21, but we have the right to use the natural gas during lease and production operations. Any
stand-alone gas development cannot hinder or impede the development of liquid hydrocarbons on
Block 21. Block 21 is approximately 1.2 million acres (4,900 square kilometers) in size or approximately
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