The Federal Government Sovereign Oil & Gas Company II, LLC has received approval of the farm-in by Oriental Energy Resources Limited of Nigeria into the Okwok Marginal Field located in Oil Mining Lease, OML 67, which is owned by Mobil Producing Nigeria Unlimited, a subsidiary of ExxonMobil Corporation, and the Nigerian National Petroleum Corporation.

The Okwok Field is located 25 miles (40 km) offshore Nigeria’s prolific southeastern producing area.

Sovereign, acting in its capacity as technical advisor to Oriental, conceived and negotiated the Okwok farm-in on Oriental’s behalf as a means for the Government of Nigeria to partially compensate Oriental for losses it sustained in late 2000 as a result of the maritime boundary treaty between Nigeria and Equatorial Guinea.

This treaty, which formalized the maritime boundary between the two countries with respect to oil drilling and development rights of the giant Zafiro Field, also had the effect of ceding the southern 20% of Oriental’s OML 115 to Equatorial Guinea.

ExxonMobil operates Block B, the license on the Equatorial Guinea side, and was thus a beneficiary of the highly prospective OML 115 acreage lost by Oriental. On the Nigerian side of the boundary, Oriental’s OML 115 is surrounded by OML 67, acreage owned by ExxonMobil and NNPC that includes two undeveloped oil fields named Okwok and Ebok.

Under Nigerian law, the Petroleum Amendment Act of 1996 on Marginal Fields empowers the Government to designate as a Marginal Field any oil fields that are not developed within 10 years of discovery and to farmout such fields to investors and local entrepreneurs.

Both the Okwok Field and the Ebok Field were discovered in 1967 and there has been no drilling in either field since 1970. It was therefore deemed appropriate for Oriental to receive the right to farm-in to these fields as compensation for its losses to ExxonMobil on the Equatorial Guinea side of the border.