Egypt’s natural gas company Dana Gas has signed an agreement with BP whereby the latter will drill Dana Gas’ first exploration well in El Matariya onshore Concession Area, Nile Delta
The concession was awarded to BP and Dana Gas in the EGAS 2014 International Bid Round.
The drilling of the well in the area is expected to start in the first half of 2016 and is expected to take approximately eight months to be completed.
Options for evacuation of the gas through Dana Gas’ nearby infrastructure will be considered by the joint venture established for the El Matariya Concession Area, company sources said.
Under the terms of the agreement, BP, as operator, will carry Dana Gas’ 50 per cent share of the cost of the well, subject to an agreed cap of US$39mn. In consideration for the carry, BP has the option, subject to government approval, to farm into parts of Dana Gas’ West El Manzala (WEM) Concession Area while retaining WEM operatorship and ownership of the existing and future shallow gas business with Dana Gas, the British explorer added.
In addition, BP has a further option, again subject to government approval, to farm into other areas of Dana Gas’ WEM Concession and into the recently-awarded North El Salhiya Concession Area for a 50 per cent participating interest in each case, if it elects to drill a second exploration well and carry Dana Gas’ 50 per cent share of the related well costs, again subject to a similar agreed cap.
Patrick Allman-Ward, CEO of Dana Gas, said, “We are very excited to be partnering with BP in drilling the Oligocene play onshore the Nile Delta. 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.”
