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Gallic Energy says that drilling of the Bhayra Rigo No.1 well on the Jorf permit commenced on July 30, 2007. The exploratory well will be drilled to approximately 2,500 meters in order to test a large Permian age reef structure, which had been identified through the interpretation of older vintage seismic data. A new 166 km 2D seismic program, acquired at the beginning of 2007, confirmed the presence of this structure and of several other anomalies also interpreted as potential reef build-ups. The well is expected to take until the end of August to reach the final depth. Gallic will pay 15% of drilling and completion costs to earn a 10% interest in the Bhayra Rigo No.1 well, with a further option to farm-in on drilling into other structures within the concession on the same terms. The national oil company, ETAP, has the right to back in on a new discovery to the extent of a 50% participation. In the event ETAP elects to participate, they are carried through the initial exploration and appraisal phase and will repay their share of past costs through their share of production.
The Jorf permit, located onshore south-central Tunisia, encompasses an area of approximately one million acres. The northern boundary of the Jorf permit is within 35 kilometers of the Gulf of Gabes. Major oil and gas pipelines from the giant El Borma oil and gas field and other southern Tunisian oil fields traverse the Jorf Prospect (within 40 kilometers from the Bharya Rigo No. 1 well) and connect to the La Skhira oil terminal in the Gulf of Gabes.