Eurogas Corp. and Atlas Petroleum Exploration Worldwide, Ltd. have entered into a farmout option agreement with Anadarko Petroleum for exploration on most of the Sfax offshore exploration permit offshore Tunisia in the Gulf of Gabes.
Eurogas and APEX currently hold 45% and 55% working interests, respectively, in the Sfax permit.
Anadarko committed to acquire, process and interpret a transition-zone 3-D seismic program covering a 420 sq km shallow-water area. Upon completion of the estimated $12-million seismic program, Anadarko will have the option to drill two exploration wells and conduct additional seismic work.
At the conclusion of this multi-phase work program and upon Anadarko's reimbursement of up to $4.5 million of past costs, Eurogas would own an 11.25% working interest in the farmout area, APEX would have a 13.75% working interest, and Anadarko would own a 75% working interest and serve as operator for any new discoveries. The company's work program is scheduled to occur over a 3 1/2-year period.
Eurogas said that it is pleased to be working with Anadarko as a company with a history of exploration success in the region and intends to bring its expertise to bear in evaluating the high potential of the Reineche, El Garia and Bireno hydrocarbon fairways running through the Sfax Offshore Permit by beginning the seismic acquisition program in mid-2006.
Specifically excluded from the agreement are three areas covering 50,400 acres surrounding three prior oil discoveries (Ras El Besh, Jawhara, and Salloum) that are deemed by Eurogas and its operating partner to be highly prospective. They will jointly retain a 100% working interest. Eurogas and APEX will continue to focus on evaluation of the retained areas, recognizing that they are of lower risk as each contains a prior discovery that tested oil from an accumulation in either the El Garia or Bireno formations.
Eurogas and APEX continue their plans to drill a well on the 1997 Ras El Besh discovery. The REB 2 well, drilled by a previous operator, tested oil from the El Garia carbonate formation. Based on interpretation of the 2004 3-D seismic survey acquired by the partners, the REB 3 well will test the crest of the Ras el Besh structure in a location that is anticipated to have up to 40 m of pay. The REB 3 well is planned to be drilled in the later part of 2006, pending rig availability.
The Sfax permit is located on a hydrocarbon fairway that trends from offshore Libya, through the Gulf of Gabes, to onshore Tunisia and is surrounded by producing fields to the west, north and east that hold reserves estimated in excess of 1 Bboe.
5/30/06
