OREANDA-NEWS. Petrel has strengthened its Iraqi investment and added another string to its Iraqi bow, by acquiring a 20 per cent shareholding in Amira Hydrocarbons Wasit B.V.(Amira). Amira, is the holder of a 25 per cent carried interest in oil and gas exploration and production licences in the Wasit Province of central Iraq. The ultimate operator and funder of the work programme is Oryx Petroleum of Canada, established by the team which built and sold Addax for USD 7.3 billion.

This strategic partnership strengthens Petrel's position in Iraq, where it has had a presence since 1999, and allows Petrel to benefit from Amira Industries' reputation and local capability. Amira Industries has been at the forefront of licence acquisitions in the Iraqi provinces and was the first oil company to sign oil and gas exploration and production contracts with the provincial governments of Salah ad Din and Wasit. The Amira deal gives Petrel an immediate effective 5 per cent carried interest through to production in exploration and production licences operated by Oryx Petroleum in Wasit.

Arman Kayablian, COO of Amira Industries N.V., has joined the board of Petrel as a non-executive director. Arman has over 10 years' experience in project finance and development operations in the energy, utilities and telecommunications industries.

The acquisition is in line with Petrel's strategy of reinforcing its interests in Iraq. The shareholding in Amira's assets expands Petrel's programme scheduled for the next 18 months, with the potential to drill one or two additional wells.

The investment in Amira is essentially a USD 500,000 option price. The initial consideration comprised an up-front cash payment of USD 500,000 and the issue of locked in 18,947,368 shares in Petrel.

A further 10,526,316 shares in Petrel will be issued when the first conventional oil well spuds. When a well is spudded these initial shares become tradeable. A second tranche of 10,526,316 shares will be issued when there is a commercial discovery. If no drilling takes place within 5 years the deal expires and all share agreements cease.

Petrel is also given a right of first refusal to participate or acquire an operated interest in any future exploration and production licences that Amira Industries secures in the Iraqi provinces of Muthanna, Karbala, Babil and Najaf. The terms of Petrel's participation in such licences are likely to be similar to Amira Industries' arrangement with Oryx Petroleum in respect of the Wasit licences.

Wasit Overview
Wasit is a large, relatively underexplored province in east central Iraq close to the giant East Baghdad field. Amira holds a 25 per cent carried interest in three contracts with the Wasit Provincial Government to explore and develop hydrocarbons in the Wasit province: an Asphalt Exploration Contract, Seismic Option Agreement and Risk Exploration Contract. The Wasit Government has a back-in right in respect of the licences which, if exercised in full, will reduce Amira's interest to 20 per cent (equivalent to a 4 per cent carried interest for Petrel).

The operator of the Wasit Licence is Oryx, a Canadian E&P independent listed on the TSX with a market capitalisation of USD 1.4 billion. To date, Oryx has identified five principal leads in the province containing 1,010 million barrels of unrisked prospective oil resources. Amira's interest in the Wasit Licence is carried to production by Oryx.

Oryx plans to commence a seismic data acquisition program in 2013 and to drill an exploration well in the first half of 2014.