Canada’s Rally Energy reported that its request for a revised pricing structure for Issaran field oil production in Egypt has been granted. The changes have resulted in an incremental payment of $440,000 for production from October 19, 2001 to June 30, 2002, stated a press release.
Under the revised pricing structure, The Egyptian General Petroleum Corporation has agreed that Rally Energy's Egyptian operating subsidiary will receive 90 percent of the Ras Gharib export blend price if Brent is below $20 per barrel, 85 percent of the Ras Gharib export blend price if Brent is between $20 and $22 per barrel and 80 percent of the Ras Gharib export blend Price if Brent is greater than $22 per barrel. The terms are valid until February 2004.
Historically the Ras Gharib export blend price has been approximately $5.10 below Brent. This agreement establishes a significantly more favorable oil price for Rally Energy's Egyptian production, justifying acceleration of development plans for the Issaran field. Management expects that oil pricing terms to be established after February 2004 will be no less favorable than the revised pricing.
Since Rally Energy assumed management of the Issaran field in May, oil production and sales have increased from 726 bbls/d in April to an average of 758 bbls/d during May and June. The 80 square kilometers of newly acquired 3-D seismic data that covers the Issaran field, acquired at a cost of $1.3 million, is currently being processed. It is expected that following an initial work over program on existing wells, an infill drilling program will be designed to significantly increase production. — (menareport.com)
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