Genel Energy plc announced Thursday that it will sell a 20 percent participating interest in the Chia Surkh Production Sharing Contract to Petoil Inc.
As a consideration for the sale of the stake, Petoil will carry Genel’s share of the costs associated with the Chia Surkh-12 (CS-12) appraisal well. The total cost of the CS-12 well is estimated to be approximately $50 million, with drilling expected to commence in the first quarter of 2016. This drilling will help refine the contingent resource estimate for the Chia Surkh license, which is currently estimated at 250 million barrels of oil equivalent, according to Genel.
On completion of the transaction, which is subject to Kurdistan Regional Government (KRG) approval, Petoil will transfer $10 million to Genel which will be released at different stages of well operations in accordance with cash calls, well completion and testing. The operatorship of the Chia Surkh PSC will also transfer from Genel to Petoil for the duration of the CS-12 well. When the transaction is complete, Genel will hold a 40 percent participating interest in the Chia Surkh license, with Petoil and KRG holding the remaining 40 and 20 percent stakes, respectively.
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