Dragon Oil plc, an international oil and gas exploration, development and production company, has signed a farm-in agreement with a wholly owned subsidiary of Cooper Energy Ltd through which Dragon Oil is to earn a 55% participating interest in and, in any development phase, assume operatorship of the Bargou Exploration Permit, offshore Tunisia.
The Bargou Exploration Permit is located in the Gulf of Hammamet in the Mediterranean Sea. The Permit covers an area of 4616km2 with predominantly offshore exploration prospects and leads in water depths of approximately 50 to 100m.
Dragon Oil is to earn a 55% participating interest in the Bargou Exploration Permit by paying 75% of the cost to drill the Hammamet West-3 well in the Hammamet West Oil Field, according to an agreed well plan scope, up to a cost cap of USD 26.6 million (on a 100% basis). If the well cost exceeds USD 26.6 million, costs in excess of this amount will be shared among the joint venture partners pro rata to their participating interest.
The well plan consists of a pilot hole followed by a horizontal section to intersect the fractures within the Abiod formation thereby increasing the flow potential of the reservoir. This well is expected to be drilled in 2012.