Seagull Energy signs development lease with EGPC

Jul 23, 1997 02:00 AM

June 30, 1997 Seagull Energy Corporation has signed a development lease with the Egyptian General Petroleum Corporation (EGPC) to develop the Wadi El Sahl discoveries on its South Hurghada concession in Egypt. Under terms of the agreement, Seagull and EGPC each have a 50 % interest in a new operating entity formed to conduct their operations at South Hurghada. They also have begun the production of crude oil from three Wadi El Sahl wells.
"This is a major step forward for our program in Egypt, which got underway only last fall with our purchase of South Hurghada and East Zeit, another wholly owned concession," explained Barry J. Galt, Seagull's Chairman and CEO. "In a very short time at South Hurghada, we have drilled two wells; confirmed the existence of commercial production; formulated, negotiated and signed a development plan, and actually initiated production. "Moreover," he added, "the methods employed to accelerate production from the concession will be beneficial to us and our partner when our activities at East Beni Suef reach this same stage." East Beni Suef is another Egyptian concession operated by Seagull. It shares the working interest there with Apache Corporation equally.

Work plans for Seagull and EGPC at South Hurghada call for several activities to be conducted simultaneously. Major elements, in addition to production, include a seismic program and further drilling in 1998. The seismic program, to get underway in 1997's third quarter, will cover an area of about 120 sq km, encompassing much of the 109-sq km development area and part of the remaining exploration concession area.
Initial production is being realised using a fleet of contract tanker trucks operating along an existing road which bypasses the town of Hurghada and other environmentally sensitive areas. The tanker trucks move crude oil approximately 100 km to an existing production terminal already operated by Seagull and EGPC. The Company expects to be trucking about 4,000 gross bpd by year-end 1997. More tanks will be constructed at the terminal as production increases in the future.
A multi-well drilling program, to be launched in 1998, will consist of an additional 3 to 6 development and exploratory wells. If this drilling program is successful and trucked production stabilises at anticipated levels, additional production facilities and possibly a pipeline from the development lease to the production terminal will be installed.

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