Junior explorer Circle Oil reported Thursday that it has agreed to farm into the Beni Khaled production license in Tunisia. The company will acquire an initial 30-percent interest in the license from Exxoil in return for the funding of a 19-square mile 3D seismic data acquisition program and one well.
The initial funding is expected to cost Circle $5 million, although the agreement allows for Circle to increase its share in the license to 50 percent in two stages by providing funding of up to $2 million for one well in each stage.
Beni Khaled is located on the Cap Bon peninsula. The license area contains the undeveloped Bir Drassen discovery well BDR-1, which has tested at a rate of 23.5 million cubic feet of gas per day and 28 barrels of condensate per day. It also indicate the potential for an unappraised oil rim, according to Circle.
The firm added that initial estimates of most-likely recoverable resources from Bir Drassen indicate between 47 and 50 billion cubic feet of gas, with the possibility of six million barrels of oil in the in the oil rim. In addition, two further undrilled leads have been identified within the production license, although these are to be confirmed by the 3D seismic survey that Circle has agreed to fund as part of the farm-in deal.
3D seismic data acquisition is planned to start in late 2013/early 2014, with a first drill expected during the second half of 2014.
Circle CEO Professor Chris Green commented in a company statement:
"We are pleased to announce this farm-in with a proven discovery and additional potential upside. This farm-in is the start of furthering the company's development for the near to mid-term and represents an opportunity to monetize a low risk opportunity in the near-term."
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