Canada’s Sea Dragon Energy has gained US privately-owned explorer IPR Energy Resources as a farm-in partner on its gas-prospective South Disouq concession in Egypt’s Nile Delta.
The Toronto-listed junior said that Dallas, Texas-based IPR had agreed to carry the cost of the first-phase commitment well subject to a cap as well as fund a share of the rest of the work programme and pay a $1.9 million signing bonus.
In return, IPR will gain a 45% non-operatorship interest in the 1275-square kilometre permit, which Sea Dragon Energy picked up last April in an Egyptian bid round.
Sea Dragon Energy chief executive Paul Welch said the farmout would provide backing both to explore the South Disouq asset’s potential and “provide Sea Dragon with the financial flexibility to continue to develop and invest resources across our wider Egyptian asset base”.
The central Nile Delta block is seen by the explorers as being part of the prolific Abu Madi-Baltim trend, which has seen ten discoveries uncover 6.3 trillion cubic feet of gas and 100 million barrels of liquids.
It is estimated to hold resource potential of more than 1.5 Tcf based on Sea Dragon technical work.
Some of Sea Dragon Energy’s managers were involved in the Nile Delta’s El Wastani discovery made by Canada’s Centurion Energy before the latter company was acquired by Dubai’s Dana Gas.
Sea Dragon Energy is focused on the Middle East and north Africa, with a current portfolio of four blocks in Egypt.
IPR holds equity interests in six concessions in Egypt, where it also has a global upstream consulting business and an oilfield services division.