Jordanian Government Cabinet Endorses Sonoran Energy's PSA
Sonoran Energy has finalized the terms of a Production Sharing Agreement (PSA) with the Natural Resources Authority (NRA) of the Hashemite Kingdom of Jordan. The terms of the PSA for the exploration and development of the Azraq Block have been endorsed by the Jordanian Government Cabinet. The PSA will be passed to the Jordanian Parliament for formal approval and ratification in its next session, leading to the signature by His Majesty King Abdullah II, King of Jordan.
In addition to the exploration and development program Sonoran Energy will also take over operation of the existing producing wells in the Azraq Block's Hamza oil field.
"The Azraq Block lies in a proven oil play fairway that we consider to be vastly under explored, particularly with respect to modern exploration and development techniques. Further, the results of Sonoran Energy's mapping of re-processed 2D seismic data has revealed the presence of additional structures and potential new plays within the Block," said Peter Rosenthal, Sonoran Energy President and CEO.
"This, combined with Jordan's favorable fiscal terms, low cost base and the presence of a ready and expanding market, indicates that we have a very good opportunity to enhance oil production from this block," said Ala Nuseibeh, Sonoran Energy Executive Vice President Middle East Operations.
"The NRA looks forward to the start of this Production Sharing Agreement, the first to be signed by Jordan in eight years," said Dr. Maher Hijazin, Director General of the National Resources Authority of Jordan. "After working with the professional team at Sonoran Energy over the past several months we are confident that the Company has the technical and financial capability to exploit the full potential of the Azraq Block, including boosting the very modest production of the Hamza field."
Following formal ratification of the PSA by the Jordanian Parliament, Sonoran Energy intends to commence an aggressive evaluation program focusing both on exploration and the potential to boost production from the existing wells and facilities. This program will involve the acquisition of 3D seismic data and the drilling of two exploration wells in addition to a number of technical studies.
The Azraq Block which is located east of the city of Amman, is approximately 11,250 sq. km. in size and contains the Hamza oil field, which has been producing since 1985. The Hamza field lies in the eastern part of the Block bordering Saudi Arabia and containing the Azraq-Sirhan Graben, which is mature for oil generation.
The primary reservoir in the field is a fractured carbonate that has been produced through a limited number of vertical wells. The last well on the field was drilled in 1989 on 2D seismic data. At one stage the field was flowing over 400 barrels of oil per day (bopd) but it is now producing around 30-40 bopd. Since its discovery in 1984, total oil production from Hamza is just under 1 million barrels of sweet oil. This is currently transported by truck to a refinery on the outskirts of Amman.
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