E&P Opportunities in North Africa

There are 20 opportunities recorded in Derrick’s “Deals in Play’” database for the region of North Africa comprising Algeria, Egypt, Morocco, Mauritania and Egypt.

Out of these 20, 12 opportunities are for stakes in exploration blocks previously awarded, 5 are opportunities relating to developing undeveloped discoveries, 1 is for a stake in a producing field and 1 is for stakes in multiple asset types (appraisal/pre-development discoveries & 1 producing field) (Map 1)

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Figure 1: Map of North Africa with locations of opportunities shown by colored circles. Circles are colored based on the asset type. Place cursor over circles for additional information on the opportunity. Click on circles to get detailed opportunity break down (pop ups need to be allowed).

The maximum opportunities are in Morocco (8), followed by Tunisia (7), Egypt (3), Algeria (1) and Mauritania (1).

Derrick has valued the following packages (developing discoveries & producing fields) - (Table 1)
1. Dana Petroleum offers 25% in exploration concession offshore Egypt
2. Roc Oil to divest package of assets offshore Mauritania
3. Canamens Energy seeks farm-in partner(s) for two licenses offshore Morocco
4. Atlas Petroleum and Eurogas seek farm-in partner for Sfax permit, offshore Tunisia
5. Cooper Energy to farmout interest in offshore Tunisian field

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Table 1: Derrick valued deals are shown with their asset types (transaction type), deal value and country. Squares are colored according to hydrocarbon type. Place cursor over squares for additional information on the opportunity. Click on circles to get detailed opportunity break down (pop ups need to be allowed), asset information and deal value.

North Africa presently accounts for 29% of total opportunities present in Africa

Apache announces 5 new discoveries in Egypt Concessions! Multi Play potential opens up!

Apache today announced five new discoveries in its Faghur Basin play in the far southwest of Egypt's Western Desert Oil and Gas province (See Map).

The Faghur discoveries include West Kalabsha-I-4, which logged 79 feet of net pay and test flowed 7150 bpd of oil and 11.4 MMcfd of gas; Faghur North-1X which logged 25 feet of net pay and test flowed 1444 bpd of oil and 3.9 MMcfd gas; Faghur South-1X which logged 38 feet of net pay and tested 2768 bpd of oil and 4 MMcfd of gas; Huni-1X which logged 27 feet of net pay and tested 970 bpd of oil and the Neith North-1X which logged 77 feet of net pay.

"The Faghur Basin continues to be a successful focus area for Apache, with AEB, Safa, and now Paleozoic reservoirs that have proven to be prolific oil and gas producers. These recent discoveries support the multi-pay potential of this oil-prone area of the Western Desert," said Tom Voytovich, vice president of Apache's Egypt Region.

Apache also said that the AG-96 development well in the Abu Gharadig Concession acquired from BP in late 2010 tested 3,347 barrels of oil and 1 million cubic feet (MMcf) of natural gas per day from the Lower Bahariya formation.

Apache paid $650 million to BP in Nov 2010 to acquire four development leases and one exploration concession across 394,300 acres. The assets have estimated proved reserves of 20 million barrels of oil equivalent (59 percent liquids), and first-half 2010 net production of 6,016 barrels of oil and 11 million cubic feet of natural gas per day.  The BP assets also included strategically positioned infrastructure- a natural gas processing plant, a liquefied petroleum gas plant and oil and gas export lines – that will enable Apache to increase production from its existing fields in the Western Desert.

Thus far in 2011, Apache has drilled eight new discoveries in 10 attempts in the Faghur Basin, and drilling is under way on three additional wells —Mandulis-1X, Neilos-1X and Faghur North-2X. Eight additional exploration wells are planned for the area this year. Apache had earlier stated in its 2010 annual report that it plans to drill 65 exploration wells in Egypt in 2011, 50% more than in 2010 (See Table 1 for Apache's exploration wells in 2011). 

Exploratory wells being drilled by Apache as operator globally in 2011. Source: Derrick Petroleum Planned Wells Exploration Database. The table does not include exploration wells where Apache is partner but non-operator. 

Apache had earlier in 2011 redeployed all non-essential expatriate personnel and all expatriate dependents from Egypt. However, key expatriate personnel remained in-country to work alongside Egyptian national personnel to manage ongoing production operations. Apache's production, located in remote locations in the Western Desert continued uninterrupted. 

Earlier in 2011, the Siwa-D-1X well drilled in the Siwa Concession pushed Jurassic and Cretaceous plays farther south and westward and will lead to follow-up exploration prospects. Apache expects to commence production from the well upon approval of a development plan later in 2011.

Apache also said that the the Tayim West-1X discovery in the West Kalabsha Concession represented the first Paleozoic success found in a reservoir separate from the younger proven Jurassic and Cretaceous sands and opens up the area to further deep tests in upcoming wells. The discovery is currently on production.

Apache's current gross operated production in Egypt totals approx. 215,000 barrels of oil and 900 MMcf of gas per day, including 40,000 barrels of oil per day from the Faghur Basin.

Click here for Apache's press release on the 5 discoveries.

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Melrose Resources reports 2010 Annual Results; 2010 Production in line with Market Guidance; Plan to invest 60% of 2011 Capital budget for development programs in Egypt

Melrose’s working interest production averaged 41.1 Mboepd during the year up 6% over 2009. Approximately 83% of the production was gas. Approx. 95% of the production came from Egypt, benefited from a full year contribution from five developments brought on stream in 2009.The company's 2010 production is inline with latest market guidance of 40.7 kboepd, contained in the quarterly 2010 Interim Management Statement.

The company forecasted US$112 million capital program for 2011, of which approximately 50% will be invested to high impact exploration in Egypt, Bulgaria, Romania and Turkey.

The company projected 2011 net entitlement production to be approximately 22,000 bopd, which will be supplemented by a full year's contribution from the Kaliakra and Kavarna fields in Bulgaria

Eni 2010-2014 business plan clouded by Africa unrest

Eni is planning to achieve 3% annual production growth by 2014, higher compared to the previous plan of 2.5%. About 80% of the production due to come on-stream over the plan period will be from giant projects, in particular from those in Venezuela, Russia, the Arctic region and Angola.

The company’s strategy of quickly developing oil and gas resources could work but depends a lot on Africa — this now looks challenged given the unrest in North Africa. ENI is one of the biggest foreign operators in Libya which gets more than half its oil and gas from Africa and which is one of the fattest dividend yields among European oil majors.

The production target is clearly at risk if the unrest goes on and if that happens, Eni have to cut the dividend. In any case the troubles remove potential upside to the 2011 dividend. Before the North Africa crisis erupted Eni had succeeded in renegotiating its gas supply contracts with Libya. But that is now on hold given the suspension of Libyan flows. Italy has increased Russian gas imports. Gazprom will now be strengthened in renegotiations with Eni as Italy, and Europe, once again relies on Russian gas.