By:Egyptoil

The Egyptian General Petroleum Corporation (EGPC) approved the consolidation of eight of Capricorn’s existing Egyptian concession agreements into a single integrated agreement to be ratified by the Egyptian Parliament in 2025.

The concessions, in which Capricorn together with Cheiron Oil and Gas Limited hold a 50% stake, are the Badr El Din (BED), Obaiyed, North Alam El Shawish, North Matruh, Sitra, BED 3, and BED 2 and BED 17 development concessions, along with the North Um Baraka exploration concession.

The new integrated agreement will provide up to a 20-year life through an initial 10-year term, followed by two five-year extensions for the development areas.

According to Capricorn’s statement, the new agreement includes improved commercial terms and a refreshed primary development term to support increased investment for the benefit of all parties.

They comprise improved fiscal terms to foster the production of both oil and gas through investment, including a profit share of 27-29%; a merged single cost pool; 40% cost recovery over four years; and a 20% excess cost recovery. In addition, the include an improved gas price of $4.25 for 1 metric million British thermal unit (mmbtu) for incremental natural gas produced from existing fields and new discoveries.

Moreover, four additional blocks will be incorporated into the BED 17 development area, and a direct award of two open exploration areas adjacent to existing acreage will be added to the integrated concession–a development that requires the drilling of 11 gross exploration wells.

“This agreement marks a key milestone in unlocking further value in our Egyptian Western Desert asset base. The three partners, EGPC, Cheiron, and Capricorn, have put in significant time and effort to construct a business case that allows all parties to benefit. With the improved terms and consolidation of the development leases, the joint venture partners will be able to justify increased investment to unlock significant contingent resources, leading to increased production and reserves for the benefit of all stakeholders. The development potential of these assets can be funded by cashflows generated in Egypt,” Randy Neely, Chief Executive, Capricorn Energy PLC said.

“With the successful outcome of this milestone in sight, we, along with our partners, will now begin the work to achieve a similar outcome for the Alam El Shawish West (AESW) joint venture,” Neely pointed out.

Capricorn Energy is an oil and gas explorer, developer, and producer with operations in several locations across the world, including Egypt’s Western Desert.