18 March 2014

The Government of the Saharawi Arab Democratic Republic (SADR) is pleased to announce that it has awarded the Bir Lahlou Block to the UK-based Red Rio Petroleum Limited (“Contractor”), effective from 18 March 2014. The award is under the Production Sharing Contract (PSC) terms previously promulgated by the SADR:

http://www.sadrpma.com/petroleum_legislation.php

The Bir Lahlou block is situated in the north-east corner of the Territory of Western Sahara (see map here: http://www.sadrpma.com/licence_offering.php, in the area controlled by the Frente POLISARIO, which leads the Government of the SADR. The block overlies part of the Paleozoic Tindouf Basin, which extends eastwards into Algeria and east and south into Mauritania. The Basin sits over the top of a stratigraphic section of rocks ranging in age from Cambrian to Carboniferous, which is analogous to other sub-Atlas basins to the north-east, and which produce large amounts of gas and oil in Algeria.

In addition to exploring the block for conventional oil and gas deposits, the Contractor will conduct a feasibility study of the suitability of the Silurian Black Shale formation to allow production of shale gas or shale oil when drilled and stimulated by hydraulic fracturing. Initial work will consist of measuring and sampling the Silurian formation in the outcrop, and analyzing the samples for total organic carbon content and degree of maturation or “cooking” undergone.

Following signature of the agreement with the SADR Government, Frederik E.Dekker, Managing Director of Red Rio Petroleum Ltd, said: “We look forward to working with the SADR authorities in evaluating the potential of the Bir Lahlou block for oil and gas, and hope to bring another company with known shale gas and shale oil knowledge from the United States of America to help exploit the block in the second phase.”

Emhamed Khadad, Advisor to the SADR President and member of the Frente Polisario leadership, said: “This is a further demonstration of the SADR’s commitment to pursue the sovereign interests of the Saharawi people in respect of their natural resources in Western Sahara. We continue to encourage appropriately qualified and committed companies to consider partnership with the SADR Government, and will work constructively with Red Rio and our other partners to reveal and realize the enormous natural resource potential of our country.”

For further information: http://www.sadrpma.com/index.php