Upland Resources has signed a farm-out agreement with Pennpetro Energy on the Saouaf permit, in Tunisia.
Pennpetro’s Nobel Petroleum USA subsidiary will take an 80% stake in the permit and also become operator. Upland will keep 20%.
The current work plan ends on December 23, 2022. Nobel and Upland will ask for a one-year extension. They will use this to acquire 300 km of 2D seismic and reprocess existing seismic.
Should the area be converted to an exploration permit, state-owned Enterprise Tunisienne d’Activités Pétroliéres (ETAP) will have a 50% stake in the area. Nobel will reduce its stake to 40% and Upland to 10%.
An exploration licence would require the companies to acquire 150 km of 2D and drill a well to a minimum depth of 1,500 metres.
“Saouaf is a large scale potentially multi-trillion cubic feet gas asset with multiple leads and prospects situated in near proximity to the TrasnsMed gas pipeline that supplies gas from Algeria through Tunisia and into Europe via Sicily,” said Upland chairman Bolhassan Di.
“Developing this asset has potential to provide exceptional returns for investors upon success.”
Pennpetro has also agreed to pay Upland for 80% of its sunk costs, around £310,000. It will cover this amount in Pennpetro shares.
Pennpetro CEO Tom Evans said Upland had done excellent technical and commercial work, in addition to building a good relationship with the Tunisian government.
Evans noted Saouaf held 10 gas prospects, with leads of up to 15.2 trillion cubic feet. “The Pyrite prospect offers an opportunity to open up an exciting new play in the area,” Evans said.