Rockhopper Exploration plc has announced that it has completed the acquisition of Beach Petroleum (Egypt) Pty Limited (Beach Egypt), announced on 18 April 2016 (the ‘Acquisition’). Beach Egypt holds a 22% interest in the Abu Sennan concession and a 25% interest in the El Qa'a Plain concession.
The previously announced non-binding letter of intent with Dover Petroleum Corporation (Dover), an affiliate of an existing partner in Abu Sennan, for the sale by Rockhopper of a 5% interest in Abu Sennan (the ‘Proposed Dover Transaction’) has lapsed and as a result Rockhopper will retain the entire 22% interest in the Abu Sennan concession.
Separate to the Acquisition, Rockhopper is currently evaluating potential opportunities available through the 2016 Egypt exploration licensing round.
Sam Moody, CEO, commented:
"We are delighted to announce the completion of this strategically important acquisition which materially increases our exposure to low cost, cash generative production assets. Unit cash operating costs at Abu Sennan during H1 2016 were approximately US$8/bbl.
"With the recent exploration success at the Al Jahraa SE-1X well, combined with the increase in estimated 2P reserves, we are delighted to be retaining the entire 22% interest in Abu Sennan.
"In the Falklands, good progress continues to be made in capturing costs savings and reducing the project break-even oil price. We expect to see FEED activity ramp-up through the remainder of 2016.
"Following completion of the Acquisition our balance sheet remains strong and we retain our year end 2016 cash guidance of US$60 - 70 million*."
Abu Sennan concession
The Abu Sennan concession is located in the Abu Gharadig basin in the Western Desert. The concession was signed in June 2007 with first commercial production achieved during 2012. Unit cash operating costs were approximately US$8/bbl during H116. The concession remains underexplored with significant exploration and appraisal upside providing opportunities for near-term production additions.
In July 2016, the Al Jahraa SE-1X oil exploration well, located approximately 6 km southeast of the Al Jahraa-1 discovery well was drilled. The well reached total depth of 3361 m in the Bahariya Formation and will shortly be brought onto production. The well intersected 16.4 m of net pay within the target Abu Roash 'C', 'D' and 'E' Members with additional pay in the secondary Upper Bahariya Formation target. Well results were above expectations.
ASH-1X ST2 is a side-track of the ASH-1X ST1 discovery well targeting previously encountered reservoirs in the Alam El- Bueib Formation in an up-dip location and aims to improve hydrocarbon productivity from the ASH Field. Sidetracking commenced on 28 July 2016 and is expected to complete during September.
The concession partners are Kuwait Energy (50% and operator) and Dover Investments (28%).
El Qa'a Plain concession
The El Qa'a Plain concession is located on the eastern shore of the Gulf of Suez and contains a number of oil leads identified on existing 2D seismic data. The concession was signed in January 2014. Approximately 470 km2 of 3D seismic plus 35 km of 2D seismic has recently been acquired and is currently being processed. The drilling of an exploration commitment well is planned in 2017. The concession partners are Dana Petroleum (37.5% and operator) and Petroceltic (37.5%).
The consideration for the Acquisition is US$11.9 million and was paid in cash to Beach Energy at completion (less a deposit previously paid to Beach Energy). The consideration was funded from the company's existing cash resources. Under the transaction terms, there is no share consideration and Beach Energy retained the economic benefit of the EGPC receivable balance as at 31 December 2015. The EGPC receivable balance as at 15 August 2016 is approximately US$10.1 million, of which US$2.7 million is for the benefit of Rockhopper with the balance for the benefit of Beach Energy.
A post completion working capital adjustment will be agreed shortly to take into account net cash flow attributable to the assets from the cash effective date of 1 January 2016.
For more information, please visit: http://www.rockhopperexploration.co.uk/
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/17082016/completion-of-acquisition-of-production-and-exploration-assets-in-egypt/