200 U.S. Gulf of Mexico blocks. The block is 30 to 90 miles (50 to 140 kilometers) offshore in water
depths of 1,300 to 5,900 feet (400 to 1,800 meters) in the central portion of the Kwanza Basin.
Sonangol P&P is our partner on Block 21 and holds a 60% working interest. For more information
regarding our Block 21 license, please see ‘‘—Material Agreements—Risk Services Agreements for
Blocks 9 and 21 Offshore Angola.’’
On August 26, 2014, we received documentation confirming that Nazaki Oil and Gaz (‘‘Nazaki’’)
and Alper Oil Limitada (‘‘Alper’’) are no longer members of the contractor group of Blocks 9 and
21 offshore Angola. Pursuant to a series of Executive Decrees passed by the Republic of Angola, the
working interests previously held by Nazaki and Alper in Blocks 9 and 21 have been transferred to and
are now held by Sonangol P&P. As a result, we no longer have any relationship with Nazaki or Alper.
The contractor groups for Blocks 9 and 21 offshore Angola now consist only of Sonangol P&P (60%
working interest) and the Company (40% working interest). Our obligation to carry and pay for Alper’s
10% working interest terminated immediately with the transfer of Alper’s interest to Sonangol P&P
pursuant to the terms of our 2010 agreements with Alper. As a result, our paying interest in these
blocks has been reduced from 62.5% to 52.5% during the initial exploration period, with Sonangol P&P
being obligated to pay the remaining 47.5%. In addition, all historical costs of our carry of Alper will
be recouped by us from Sonangol P&P’s share of production revenues from these blocks. We are the
operator of Blocks 9 and 21.
Block 20 offshore Angola.
We acquired our license to explore for, develop and produce oil from
Block 20 offshore Angola by executing a Production Sharing Contract (the ‘‘Block 20 PSC’’) with
Sonangol. The Block 20 PSC governs our 40% working interest in and operatorship of Block 20
offshore Angola and forms the basis of our exploration, development and production operations on
Block 20 offshore Angola. Sonangol P&P and BP are the other holders of working interests under the
Block 20 PSC. The Block 20 PSC provides for an initial exploration period of five years, which is
scheduled to expire on January 1, 2017, and an optional exploration period of an additional three years.
We do not have contractual rights to sell natural gas on Block 20 offshore Angola, 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 20. Block 20 is
approximately 1.2 million acres (4,900 square kilometers) in size or approximately 200 U.S. Gulf of
Mexico blocks and is centered approximately 75 miles west of Luanda in the deepwater Kwanza Basin.
It is immediately to the north of Block 21. For more information regarding our Block 20 license, please
see ‘‘—Material Agreements—Production Sharing Contract for Block 20 Offshore Angola.’’
Diaba Block offshore Gabon.
We acquired our non-operated 21.25% working interest in the Diaba
Block offshore Gabon by entering into an assignment agreement with Total Gabon. Through the
assignment we became a party to the Production Sharing Agreement (‘‘PSA’’) between the operator
Total Gabon and the Republic of Gabon. The PSA gives us the right to recover costs incurred and
receive a share of the remaining profit from any commercial discoveries made on the block. We have
contractual rights to any form of hydrocarbons, including natural gas, discovered on our Gabon license
area. The Diaba Block is approximately 2.2 million acres (9,100 square kilometers) in size or
approximately 370 U.S. Gulf of Mexico blocks. The block is 40 to 120 miles (60 to 200 kilometers)
offshore in water depths of 300 to 10,500 feet (100 to 3,200 meters) in the central portion of the
offshore South Gabon Coastal basin.
As of December 31, 2014, our working interests in Blocks 9, 20 and 21 offshore Angola and the
Diaba Block offshore Gabon comprised an aggregate 5,652,687 gross (1,840,581 net) undeveloped
acres. We do not currently own any working interests in developed acreage offshore Angola, although
exploration wells have discovered hydrocarbons at Cameia, Mavinga and Bicuar on Block 21 offshore
Angola and at Lontra and Orca on Block 20 offshore Angola. We have filed a declaration of
commercial well with respect to each of those exploration wells pursuant to the terms of the Block 21
RSA and the Block 20 PSC. On February 28, 2014, we submitted a formal declaration of commercial
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