The Bargou permit, located in the Gulf of Hammamet in the Mediterranean Sea, covers an area of 4,616 sq km with predominantly offshore exploration prospects and leads in water depths of about 50m to 100m.
The company will earn the 55% interest 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 $26.6m (on a 100% basis).
The field is located in the northern part of the permit and covers 205 sq km in water depths of about 50m.
If the well cost exceeds $26.6m, costs in excess of this amount will be shared among the joint venture partners pro rata to their participating interest.
According to Dragon Oil, 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, and the well is expected to be drilled next year.
Following completion of the farm-in agreement, Dragon Oil will hold a 55% interest in the Bargou joint venture, while Cooper Energy and Jacka Resources will hold 30% and 15% interests, respectively.
