The new concession agreement comes with improved commercial terms. (Image source: Adobe Stock)

The Egyptian General Petroleum Corporation (EGPC) has approved the consolidation of eight of Capricorn's existing Egyptian concession agreements into a new, single integrated concession agreement 

The company jointly holds a 50% participating interest with the concessions operator, Cheiron Oil and Gas Limited. The integrated concession agreement is subject to Egyptian Parliamentary ratification which is expected to take place in 2025.

The new concession agreement comes with improved commercial terms and a refreshed primary development term to support increased investment, for the benefit of all parties.

The Badr El Din (BED), Obaiyed, North Alam El Shawish, North Matruh, Sitra, BED 3, and BED 2 and BED 17 development concessions, along with the North Um Baraka exploration concession, will now be combined into a single integrated concession. It will have a 20-year scope through an initial 10-year term, plus two five-year extensions for the development areas.

The enhanced fiscal terms include profit share of 27-29%, a merged single cost pool, 40% cost recovery over four years, and excess cost recovery of 20%.

An improved gas price of US$4.25/mmbtu for incremental gas produced from existing fields and new discoveries agreed to promote increased gas production.

Four additional blocks will be incorporated into the BED 17 development area.

The direct award of two open exploration areas adjacent to existing acreage will be added to the integrated concession which will require the drilling of 11 gross exploration wells.

Randy Neely, chief executive, Capricorn Energy PLC said, “This agreement marks a key milestone in unlocking further value in our Egyptian Western Desert asset base. The three partners: EGPC, Cheiron and Capricorn have put in significant time and effort to construct a business case that allows all parties to benefit. With the improved terms and consolidation of the development leases, the joint venture partners will be able to justify increased investment to unlock significant contingent resources, leading to increased production and reserves for the benefit of all stakeholders. The development potential of these assets is fully capable of being funded by cashflows generated in Egypt.

With the successful outcome of this milestone in sight, we, along with our partners, will now begin the work to achieve a similar outcome for the Alam El Shawish West (AESW) joint venture.

We believe this agreement is a very important step in restoring Capricorn as a premier small-cap energy company. In addition to our achievements in Egypt, we continue to actively evaluate material opportunities in the UK North Sea. Combined, these initiatives will make Capricorn significantly more sustainable as a business and attractive as an energy investment.”

Vaalco delivered another successful quarter. (Image source: Adobe Stock)

Vaalco Energy has highlighted the acquisition of operatorship and 70% interests in CI-705 block offshore Ivory Coast in its update for the first quarter of 2025 

The farm-in agreement took place in March with Ivory Coast Exploration Oil & Gas and Petroci. While the water depth across Block CI-705 can potentially reach around 2,500 m, three wells in the area has undergone light exploration till date.

Belonging in the prolific Tano Basin, the CI-705 block lies approximately 70 km off the West of Baobab and Kossipo oil fields, also operated by Vaalco. While Kossipo awaits development work in the near future, the company has currently sent the Baobab Floating Production Storage and Offloading vessel for refurbishment before it is ready for drilling activities by 2026. 

"In Cote D’Ivoire, we commenced the FPSO refurbishment project and are preparing for a drilling campaign in 2026 to augment the production and economic life of the Baobab field," said George Maxwell, Vaalco’s chief executive officer. 

The company reported promising results from Egypt, where all five wells were brought online, with boosted production levels. To top that, new reserves and a new production zone were discovered in the Bakr formation as well, which is currently being reviewed for flow improvement because of its heavy oil presence. 

In Gabon too additional production was reported, whereby the Ebouri 4-H well flowed for over four months, and the H2S concentration is within modeling expectations.

“We delivered another successful quarter, once again meeting or exceeding our guidance...We continue to execute our strategic vision, with multiple accomplishments achieved in the first quarter that lay the foundation for profitable growth in 2025 and beyond," said Maxwell. 

Also read: 

  Vaalco Energy prepares for West Africa work 

Vaalco to deploy Borr Drilling's rig offshore Gabon 

Vaalco Energy reports strong Q2 in 2024

Chevron is excited about its portfolio in the Eastern Mediterranean. (Image source: Adobe Stock)

With an aim to advance reach in the West Star block, US energy major Chevron has initiated talks with the Egyptian government

The area lies in the south of ExxonMobil’s major Cairo and Masry blocks in the deep offshore near the Cyprus border.

This is an addition to Chevron's earlier bid for two out of the 12 blocks that the Egyptian Natural Gas Holding Company (EGAS) had opened for investors. Chevron is awaiting finalisation of the awards in the next few months.

Following a US$5bn acquisition of Noble Energy in 2020, Chevron has been strengthening its footprint in the East Mediterranean, undeterred by the current industry turbulences.  

“We are excited about our entire portfolio in the Eastern Mediterranean,” believes CEO Mike Wirth. “We have got some good exploration acreage in the offshore Egypt area that we brought to the table as well and the expectation is for some exploration wells there in the coming couple of years,” he said.

Chevron is willing to invest around US$$120mn in the West Star concession in the northeast Mediterranean following approval from the Ministry of Petroleum.

Each block revealed 10 billion barrels of crude. (Image source: Adobe Stock)

Turkey has recovered commercially viable hydrocarbons from two out of the three exploration blocks that it operates in Somalia 

Promising 10 billion barrels of crude from each of the blocks, the discovery puts the East African country in line with the globally reputed, resources-rich West African regions.

While preliminary drilling is completed and geological surveys conducted in both the blocks, the third block is still under exploration. Turkey will be doing laboratory analysis to determine the quality and grade of the oil from the third block, presumably by August. 

Turkey has got itself a sweet deal with Somalia agreeing to 90% stake in revenues for Ankara from offshore oil production. While it has drawn considerable scepticism, Somalia's President Hassan Sheikh Mohamud said that "This is not about favoring Turkey." He added, "Rather, Turkey is the first to step up and show real commitment to invest."