Dana Gas subsidiary wins Egypt contracts
The contracts are part of the EGAS bidding round recently held
Dana Gas has announced that its wholly owned subsidiary, Dana Gas Egypt, has been awarded the North El Salhiya (Block 1) and El Matariya (Block 3) onshore Concessions in the Nile Delta as part of the 2014 EGAS bidding round held recently in Egypt.
The company will operate the Block 1 Concession Area on a 100% basis. It is expected that exploration success and future production from conventional gas reservoirs in the Block, Dana Gas Egypt will participate in the Block 3 Concession Area on a 50% basis with BP as partner and operator.
Under the terms of the agreement, BP will fund all of the cost (including Dana Gas's share) of one exploration well up to an agreed maximum limit. In the event that the well proves commercial, BP has the option to back into 50% of the deep potential of Dana Gas' adjacent Development Leases.
BP also has the option to back into 50% of the deep potential of Dana Gas Egypt's other Development Leases and Block 1 Concession Area by drilling and funding all of the costs of a second exploration well in either the Development Leases or Block 1 up to an agreed maximum limit.
“We are extremely pleased to have been awarded these two new blocks. The area is particularly well known to Dana Gas, given its long-term commitment to the Nile Delta. We believe there is significant upside potential from continued explorationand development in these concessions,” Dr. Patrick Allman-Ward, CEO, Dana Gas, said
“We are delighted to be partnering with BP, a leader in deep well drilling in the Nile Delta. This will allow us to carry out a challenging work program with a proven partner and reaffirms our confidence in the potential of our assets.”
The two blocks have a six- year exploration period, comprised of two phases of three years each. A 20-year development lease period will be granted to each block, based on approved commercial discovery.