UAE firm Dana Gas has signed an agreement with BP, which will see the companies share the costs of drilling the first exploration well in the El Matariya onshore Concession Area, Nile Delta in Egypt.
Under the terms of the agreement, BP will act as operator and pay up to $39mn of the cost, with drilling expected to begin in the first half of 2016.
BP will also have the option to work on parts of Dana Gas’s West El Manzala Concession Area.
In addition, BP has a further option, again subject to Government approval, to farm into other areas of Dana Gas’s WEM Concession and into the recently-awarded North El Salhiya Concession Area, for a 50% participating interest.
If it elects to drill a second exploration well and carry Dana Gas’s 50% share of the related well costs, again subject to a similar agreed cap.
“We are very excited to be partnering with BP in drilling the Oligocene play onshore the Nile delta,” Patrick Allman-Ward, CEO Dana Gas, commented.
“This play has long been identified as having a significant potential in our concession area and, in particular, the Mocha prospect, which is the target of the exploration well to be drilled by BP in the El Matariya Concession Area with Dana Gas’ carried interest.
“A successful well result could lead to substantial growth for the Company in Egypt, open up the onshore Oligocene play in the Nile delta and could ultimately lead to a material increase in onshore gas production in Egypt.”
