Centurion, Shell to pursue Nile Delta LNG

March 20, 2006
Two Egyptian units of Royal Dutch Shell PLC took a farmout from Centurion Energy International Inc., Calgary, to acquire 50% interest in the West El Manzala and West El Qantara concessions onshore in the Nile Delta.

By OGJ editors
HOUSTON, Mar. 20 -- Two Egyptian units of Royal Dutch Shell PLC took a farmout from Centurion Energy International Inc., Calgary, to acquire 50% interest in the West El Manzala and West El Qantara concessions onshore in the Nile Delta.

Shell and Centurion will cooperate in developing LNG opportunities if threshold quantities of gas are discovered on the concessions, subject to government approvals. Centurion remains operator.

Shell will pay Centurion $15 million and provide 50% of all future exploration and development costs as long as the two companies own the concessions. Shell will pay Centurion $20 million more if it continues after drilling five wells. Centurion spudded the first of the five wells on Feb. 7.

The concessions, which cover a combined 800,000 acres, surround Centurion's wholly owned El Wastani and South El Manzala development leases that are producing 200 MMscfd of gas and 6,500 b/d of liquids.

Extensive 3D seismic has confirmed several prospects and leads on the two blocks in plays similar to those on Centurion's nearby development leases. Fifteen exploration and appraisal wells are planned in the 2006 capital program for the two concessions.

Each concession has an initial 3-year exploration term with the option to extend the exploration term by two further 3-year terms.