Circle Oil has entered into an farm-in agreement with Exxoil for the onshore Beni Khaled production licence for gas, located in Tunisia’s Cap Bon peninsula
Under the terms of the agreement, the Irish oil and gas company will acquire an initial 30 per cent interest in the licence in lieu of US$5mn for a 50 sq km 3D seismic programme and one well.
Exxoil be operator of the licence, company sources said.
Circle Oil said that the agreement is also subject to the necessary approvals of the Tunisian government and authorities concerned.
The licence area contains the undeveloped Bir Drassen discovery well BDR-1, which under test flowed at a test rate of 665,445 standard cubic metres per day of gas and 28 barrels of condensate per day (bcpd). The test also indicated the potential for an unappraised oil rim.
Initial operator estimates of most likely recoverable resources from the Bir Drassen discovery indicate 1.3bn-1.4bn cubic metres of gas, the Irish explorer said.
Chris Green, chief executive officer of Circle Oil, said, “We are pleased to announce this farm-in with a proven discovery and additional potential upside. This farm-in is the start of furthering the company’s development for the near to mid-term and represents an opportunity to monetise a low risk opportunity in the near-term.”
The 3D seismic acquisition is expected to start in late 2013 or Q1 2014 with first drilling planned for early half of 2014.
The Beni Khaled field currently produces approximately 80-100 bopd of light oil from EBK-1 well, sources said.
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