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Artumas Finances Next Stage of Appraisal Programme in Tanzania and Exploration Programmes in Mozambique


Artumas today announced that it has signed an option agreement with Maurel & Prom and Cove Energy plc ("Purchasers"), granting the Purchasers the option to purchase a 51% participating interest in Artumas' Tanzanian gas assets, a 34% participating interest in Artumas' onshore Mozambique assets and all of Artumas' 8.5% participating interest in offshore Mozambique. As part of the transaction, Artumas has granted the Purchasers exclusivity until and including 18 August 2009, at which time the option must be exercised by the Purchasers or it will fall away. If the Purchasers elect to exercise the option, completion of the optioned transactions is subject to a number of conditions and approvals of related parties and effected governments and is expected to complete in Q3 2009.

Artumas will receive approximately USD 1.02 million as consideration for entering into the option agreement. If the optioned transactions complete Artumas will receive further consideration of approximately USD 10.98 million (with the option payment and further consideration totalling USD 12 million). In addition, pursuant to a separate letter agreement between Cove Energy, M&P and Artumas dated 21 July 2009 it is the intention of the parties that Artumas will be granted the following: (a) a carried interest on an approximately 600 square km 3D seismic acquisition program in Tanzania; (b) an option to be carried on each of two appraisal wells to be drilled in Tanzania which can be exercised by Artumas in consideration for a further assignment to Cove and M&P of a 5% participating interest in the Tanzanian concession per well; (c) an 0.85% royalty on the offshore Mozambique asset after certain costs are recovered; and (d) a carried interest through the first well in respect of Artumas' retained 15.3% participating interest in the onshore Mozambique asset.
Maurel & Prom was created as a trading company in 1813. Led by its current Chairman and Chief Executive Officer, Jean-François Hénin, Maurel & Prom's business focusses on hydrocarbon exploration and production. The optioned transaction is expected to add scale to Maurel & Prom's interests in Tanzania, where it currently holds a 60% participating interest in the Bigwa - Rufiji & Mafia block, and a 50% participating interest in the Mandawa block. The proximity of the Mozambique blocks to Artumas' gas interests in Tanzania also provides potential synergies. Maurel & Prom is listed on Euronext Paris. For further information, see www.maureletprom.fr.
Cove Energy plc is quoted on the London Stock Exchange AIM market. Led by a management team with extensive and successful experience of African hydrocarbon exploration and production, Cove's business strategy is to acquire and develop oil and gas opportunities in Africa and the Eastern Mediterranean. For further information, see www.cove-energy.com.
The optioned transaction introduces strong and experienced companies to Artumas' concessions in Mozambique, and provides a solid foundation for the continued performance of Artumas' development obligations in respect of the two Mozambique concessions.

In addition, combining the exploration skills of M&P/Cove with the operating and development skills and experience of Artumas in Tanzania, the new consortium possesses a strong foundation for growth and development in Tanzania which will utilize the established infrastructure base, managed by a 92% Tanzanian workforce.

Cameron Barton (Acting President & CEO and CFO of Artumas) stated that, "this arrangement allows Artumas to undertake a necessary and substantial appraisal program in the Tanzanian concession and to continue to participate in the next stage of the highly prospective Mozambique exploration programme. The objective of the 3D in Tanzania will be firm up drilling locations for the next two appraisal wells which will be designed to enhance the established gas resource. This will then significantly strengthen our ability secure large scale commercialise opportunties."

Mr. Barton also stated that he, "wished to assure the Tanzanian Government and the power consumers of southern Tanzania that the change being announced to the gas business will serve to enhance our ability to perform our power commitments to the region."

Seems like Maurel & Prom can see big potential in the region, and are actively seeking to expand their interests in Tanzania.

Cove Energy are interesting, having something of a rebirth and name change. I like this self-description "The Company's initial focus will be on Africa and the Mediterranean. The Company will be "opportunity driven" but the objective is to target assets in areas where larger oil companies are not yet active or may have overlooked opportunities. Cove Energy will also seek out assets owned by companies in distress, for instance, as a result of the current global economic climate."

Cove seem to be interested in very similar regions to KEY.