Privately-owned Apex International has boosted its exposure to Egypt’s oil-rich Western Desert play after acquiring stakes held by Italian major Eni, deals that will boost its production to 11,500 barrels per day.
The Houston-based player — whose biggest investor is private equity player Bluewater — is focused on exploiting oil onshore Egypt via its Farah joint venture with state-owned Egyptian General Petroleum Corporation (EGPC).
The Eni acquisitions will boost Apex's output from 7000 bpd, making the company the eight biggest oil producer in Egypt.
All told, Apex will buy interests in six concessions from IEOC Production, a unit of Eni, albeit two of the concessions will only come into its hands after the government has granted licence extensions — expected in the first quarter of 2023.
Apex has bought all IEOC’s interests in the Ras Qattara, West El Razzak and East Kanayis concessions, with the West Abu Gharadig concession to be acquired following an extension.
It will become operator of all four tracts through Farah Petroleum Company (PetroFarah), its joint venture with EGPC.
Apex has also acquired a 25% interest in the East Obaiyed concession and will secure a 25% stake in the South West Meleiha concession following an extension, although IEOC will remain operator.
The acquisition is being financed in part through a senior secured borrowing base facility arranged by The Mauritius Commercial Bank Limited.
In addition, Apex and IEOC were recently awarded the East Siwa exploration concession in the Western Desert, each with 50% interest with Apex as operator.
This concession agreement has been approved by EGPC and is expected to be approved by parliament and signed into law in the second quarter of 2023.
The newly acquired assets are all close to Apex’s South East Meleiha (SEM) where it has a 100% stake and where oil production is running at 7000 bpd.
The acquisition will also give Apex control over certain pipeline and other infrastructure that it currently uses for its SEM operations.
Four new fields have been discovered in SEM since January 2021 and Apex hopes for more exploration success this year.
The US company also expects to start its first natural gas production during the second quarter of 2023, when the Faramid project in East Obaiyed is due online.
Roger Plank, Apex chairman and founder, said these concession acquisitions are "significant step" in the company's strategy to become "a leading independent" player in the Western Desert.
Commenting on the deals with Eni, Apex chief executive Thomas Maher said: “We look forward to integrating these synergistic assets into PetroFarah to optimise and increase production."
He noted that “Eni is already our partner in the East Siwa block (and) given the strongly complementary nature of our Western Desert operations, we look forward to closer collaboration to deliver strong operational, cost and resource upside benefits.”