Source: Beach Energy
Beach Energy Limited has executed Sale and Purchase agreements which will give it exposure to new oil exploration opportunities in two highly prospective Egyptian onshore concessions.
Beach will gain a 22% stake in the Abu Sennan Concession in the Western Desert and a 15% interest in the Mesaha Area Concession in southern Egypt at a cost (subject to firm and contingent work programs) of up to US$33 million over the next two years. The deal is to be effective from January 1, 2010.
The agreement is subject to Egyptian regulatory authority approval and endorsement.
The new concessions, which include an undeveloped oil discovery, add to Beach’s existing North Shadwan and South East July concessions in Egypt. First production from the NS-377 oil field in the North Shadwan concession is expected during the second half of 2010.
3D seismic technology has substantially reduced the exploration risk in the Western Desert in Egypt in recent years with significant exploration success recorded.
The Abu Sennan concession (300km west of Cairo) covers approximately 1600 km2. 3D seismic has recently been acquired over the entire permit. The block contains many attractive oil prospects with at least four to be drilled in the 2011 financial year. Each of these prospects has multiple target reservoirs. Concurrently with this drilling, the Operator will work with the Egyptian regulatory authorities to get approval for a further ten wells.
Appraisal drilling of the GPZZ discovery to establish reserve size is expected in the current quarter. Deeper targets, with highly productive reservoirs with the potential to add tens of millions of barrels of oil equivalent to field reserves, have been successfully drilled in neighbouring concessions.
The Mesaha concession lies in southern Egypt on the Sudanese border and covers approximately 57,000km2. A regional 2D seismic program is currently being acquired. The part of the Mesaha Graben which is located in the Mesaha concession is larger than the Gulf of Suez.
Following completion of the acquisitions, subject to waiver of pre-emption rights by joint venture parties and approvals by the Egyptian regulatory authorities, participants in the tenements will be Kuwait Energy with 50 percent interest and operatorship, Beach Petroleum with 22 percent, and Dover Investments with 28 percent.