Oil and gas explorer Sea Dragon Energy has entered into an agreement to farm out part of its South Disouq concession to fellow independent operator IPR Energy Resources.
As part of the deal Sea Dragon is selling IPR a 45 per cent interest in the concession, which is located in Egypts Nile Delta.
Under the terms of the deal IPR will carry the cost of the first phase commitment well, subject to a cap, pay $1.9m of the signature bonus, fund its proportionate share of the remaining work program, and will have the option to operate the commitment well.
Speaking about the deal Sea Dragon CEO Paul Welch said, the farm-out will provide Sea Dragon with the financial flexibility to continue to develop and invest resources across our wider Egyptian asset base.
IPR is a privately held company based in Texas with exploration and production assets in Egypt, the US, and Pakistan.
IPR has been active in Egypt for over 30 years and currently has operations and equity interests in six concessions.
The farm-out agreement remains subject to final approval by the regulatory authorities in Egypt. Once the deal is approved Sea Dragon will have a 55 per cent interest in the concession, with IPR holding the remaining 45 per cent.