EOG Resources Inc. subsidiary EOG Resources Oman Block 49 Ltd. agreed to acquire a 50% interest in the exploration and production sharing agreement (EPSA) covering Block 49 onshore Oman from Tethys Oil subsidiary Tethys Oil Montasar Ltd.
EOG also will have the option to assume operatorship of the block and increase its interest to 85% for any operation relating to unconventional hydrocarbon resources. The agreement is subject to government approval.
EOG will acquire access to the data from several thousand line-km of 2D seismic grids, two recently acquired seismic surveys (2D and 3D), nine exploration wells, plus additional geotechnical studies and reports. As consideration for both the 50% interest and access to data, EOG will refund all costs incurred on the block and fund the Thameen-1 exploration well, up to a combined amount of $15 million.
Tethys will continue as operator for the first exploration period including the drilling of the Thameen-1 well. Should EOG exercise its option to become operator and increase its interest to 85%, Tethys would retain 15%. The agreement includes consideration if the option is exercised and in the case of commercial development of unconventional hydrocarbon resources. The parties would each retain 50% of any operations relating to conventional hydrocarbon resources.
Tethys Oil acquired the 15,439-sq-km block in 2017 (OGJ Online, Nov. 13, 2017). After 3 years of seismic work, including reprocessing of older seismic data and processing and interpretation of seismic data from two new campaigns, Tethys is ready to drill the Thameen-1 well. The well is expected to spud in mid-December 2020 and to be drilled to a depth of close to 4,000 meters to evaluate three potential reservoir targets.
The initial 3-year exploration phase for the block has been extended by 1 year and runs until December 2021. EPSA holders can elect to enter into a second exploration phase of an additional 3 years.
