StockMarketWire.com - Genel Energy said it had agreed to acquire stakes in two oil blocks in the Kurdistan region of Iraq currently operated by Chevron.

Genel said it would acquire 30% of the Sarta licence by paying a 50% share of ongoing field development costs until a specific production target was reached.

Chevron would retain a 50% interest in Sarta and the Kurdistan regional government would hold the remaining 20%.

Genel also agreed to acquire 40% of the Qara Dagh appraisal licence and would become the operator through a carry arrangement.

Chevron would retain 40% of the equity, with the KRG holding the remaining 20%.

Genel said its estimate of total spend at Sarta up to end-2020 was around $60m.

Drilling began on the first appraisal well, Sarta-3, in the fourth quarter of 2017. The well was successfully completed and tested during the second quarter of 2018.

Both that and the Sarta-2 well individually tested at rates of around 7,500 barrels of oil per day, with the first phase of development expected to see those wells placed on production.

At Qara Dagh, the Qara Dagh-2 well was set to be drilled in 2020.

The Qara Dagh-1 well, completed in 2011, tested oil in two zones from the Shiranish formation.

'We are delighted to have been chosen as a partner to Chevron,' chief executive Murat Ozgul said.

'The agreement provides access to a phased development opportunity with significant growth potential at Sarta, and an exciting appraisal opportunity at Qara Dagh.'

'The additions to our portfolio are an important step in our diversification strategy, offering a further opportunity for near-term production and cash-generation.'


At 2:37pm: [LON:GENL] Genel Energy PLC share price was +12.3p at 209.5p



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