Petroleum Africa
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Friday, November 7, 2008
Beach Petroleum Ltd. announced that it has received Ministerial approval to acquire interests in two highly promising Egyptian oil concessions. Egypt’s Ministry of Petroleum approved deeds of assignment on November 1 in respect to the North Shadwan and South East July concessions in the Gulf of Suez.
The North Shadwan license is operated by BP Exploration (Delta) Ltd. and contains three existing, undeveloped oil discoveries and several attractive exploration prospects. Government approval to develop two of these fields, close to the eastern shore of the Gulf, has been granted, with first production from these fields planned for late in 2009.
The Aussie company says that it could “begin to reap its share of oil production from the North Shadwan concession as early as next year.”
The JV operating company (named Petroshadwan) is currently being established. Drilling is currently underway on the third discovery, with the Burtocal-2 well appraising the NS394-1A “Burtocal” discovery made in late 2007. The discovery well penetrated a thick oil column within the Nubia Formation, an extremely prolific reservoir across the Gulf of Suez. The appraisal well is testing separate fault compartments in the Burtocal structure and is designed to assist in delineating potential reserves to allow for evaluation of possible development options.
Under an agreement with Tri-Ocean Energy Company (“Tri-Ocean”), Beach is acquiring a 20% interest in the North Shadwan Concession at a cost of US$110 million. Funds in US dollars for this acquisition were converted at an effective rate of AUD:USD of 0.9109 in July this year and have been held in escrow since then. On completion of the acquisition the interests in the concession will be held by BP Exploration (Delta) Ltd. (50%), Tri-Ocean (30%), and Beach (20%).
The South East July concession contains several attractive oil prospects surrounded by existing oil fields, notably the July field (700 million barrels estimated ultimate recoverable (EUR)), the Ramadan field (600 million barrels EUR) and the Morgan field (1.5 billion barrels EUR) Following completion of this transaction, which is via a farm-in arrangement with Santos Egypt Pty Ltd., the interests in this concession will be Santos Egypt (40% and Operator), Dana Petroleum (40%) and Beach (20%).
The South July-1 well will be operated by Dana Petroleum and is planned to be drilled in December 2008 on a prospect approximately 10 km west of the Saqqara oil field. The South July-1 well will target potential reserves of up to 100 million barrels in stacked reservoir sands in the Miocene and Nubia Formations. Equipment, pipelines and processing capacity are well developed in the Gulf of Suez region and a skilled workforce is available, ensuring that field development can be progressed efficiently.
“The acquisition of these concessions is a result of Beach’s efforts to expand and diversify its operations to give the Company exposure to new oil production and to projects that have the potential to make material additions to the Company’s reserve base and production profile in the near future,” Beach’s Managing Director, Mr Reg Nelson, said today.
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