OilVoice - Tethys Oil signs Petroleum Agreement in Morocco

Tethys Oil signs Petroleum Agreement in Morocco

Friday, June 15, 2007

Tethys Oil has signed a Petroleum Agreement with the Moroccan state oil and mining company, ONHYM, and partners Dana Petroleum and Eastern Petroleum for the Bouanane Exploration Permits. These new permits follow a Reconnaissance Licence over the same area where the Tafejjart prospect had been identified.

The Reconnaissance License work program confirmed the prospectivity of the area for natural gas, and delineated some prospects through seismic reprocessing and gravimetric studies. The Exploration Permits, Bouanane I and Bouanane II, cover an area of 2,115 square kilometres in eastern Morocco. Dana will be the Operator holding a 50 per cent interest in the license, with Tethys and Eastern holding 12.5 per cent each. ONHYM has a carried 25 per cent interest. The Agreement is valid for a term of 8 years, divided into 3 periods. During the first period either 2D seismic needs to be acquired, or an exploration well needs to be drilled.

The signing of the Petroleum Agreement farm out is the result of a process that started in July 2005, when Tethys as operator was awarded 50 per cent in a one year Reconnaissance Licence over the Bouanane area. Eastern Petroleum was partner with the remaining 50 per cent. During 2006, the work programme associated with the licence was c ompleted by summer with encouraging results, and a farmout agreement signed with Dana in September.

"The Bouanane licence offers Tethys 12.5 per cent interest in an exploration project with tremendous potential where Dana will pay the first 12 MUSD of exploration costs. The reimbursement of past costs creates the opportunity to use that money over again to create a similar opportunity.' says Managing Director Magnus Nordin.