Apex International Energy Reports Strong Performance in Egypt’s Western Desert

Apex International Energyhas released an update on its operations and commercial progress in Egypt’s Western Desert oil producing region for the first half of 2024. The company holds eight concessions (six operated) in this prolific area.

Apex has drilled a total of 10 wells to date. Six of these wells are currently producing, one serves as a water supply well for a water injection project, two are discoveries awaiting completions, and one was a dry hole.

The ongoing drilling campaign, utilizing the EDC-65 rig, has concentrated on the continued development of Apex’s Fajr and Farah fields, delineation of the Mashreq-N and RAM fields, and exploration activities, all within the Southeast Meleiha (SEM) concession. Additionally, a commitment well was drilled in the Zarif field in the Ras Qattara concession.

The recent Fajr-40 well demonstrated a sustained rate of 500 barrels of oil per day (bopd) from the Upper Bahariya (UBAH) formation in late May and is now producing. This successful test confirms the potential for further development of this horizon in the Fajr field and the possibility of future recompletions in existing Middle Bahariya (MBAH) producers.

Both the Zarif 47 well (drilled in February 2023) and the Zarif 49 well (drilled in April 2024) were completed as producers in the UBAH and commenced production in the second quarter.

The RAM-3 well, drilled in May, further delineated the RAM field in the Qattara Depression (discovered in August 2023). This well tested gas and condensate from the Lower Bahariya and Middle Bahariya formations and will be temporarily abandoned for potential future gas completion, possibly in conjunction with future deep gas exploration prospects in the area.

In its non-operated concessions (25% interest; IEOC-operated), gas production from the Faramid project in the East Obaiyed concession has remained consistent at approximately 23 million cubic feet per day (MMcfd), or 3,830 bopd from two wells.

In the South West Meleiha concession, the SMEL C-1X exploration well encountered oil in the Bahariya formation and began production in May at a rate of around 400 bopd.

Apex’s total working interest production has reached 12,000 barrels of oil equivalent per day (boed) on multiple occasions and averaged between 11,500-12,000 boed throughout the first half of 2024, positioning Apex among the top 10 liquids producers in Egypt.

In the Qattara Depression of the SEM concession, drilling of the SEMR-D1X exploration well commenced in late May. The well encountered 81 feet of continuous, highly porous gas pay in the Dabaa formation, 28 feet of calculated gas pay in the Apollonia Formation, and 12 feet of oil pay in the Upper Bahariya (UBAH).

While no commercial hydrocarbons were found in the primary target Alam El-Bueib (AEB) sandstones, the lower portion of the well has been plugged and abandoned to prepare for testing the UBAH pay zone.

The EDC-65 rig will next drill the SEMR-E1X exploration well, targeting the AEB with potential prospectivity in the Bahariya and shallower horizons.

Following this, the rig will be released while Apex analyzes the data gathered in 2024 and plans future development and exploration campaigns. In East Siwa, reprocessing of 2D seismic data is nearing completion, after which an exploration drilling location will be selected.

Independent reserve auditors recently assessed Apex’s reserves as of year-end 2023. Audited 2P reserves totaled 29.1 million barrels of oil equivalent (MMboe) (Apex working interest), up 14% from 25.5 MMboe at year-end 2022, aligning with the company’s internal estimates. This places Apex among the top 10 commercial reserves holders in the Western Desert.

On May 27, 2024, the Minister of Petroleum signed a new concession agreement for Ras Qattara between the government of Egypt, EGPC, Apex, and INA-Industrija Nafte, d.d.

The agreement has a firm term of five years, extendable for another five years with ministerial approval, and includes terms to extend the field’s economic life and ultimate recovery.

A two-well drilling commitment is also part of the agreement, with the first well, Zarif 49, already completed and producing.

Apex is negotiating with EGPC to extend its SEM exploration acreage for three years beyond its November 2024 expiration date.

The company also seeks to modernize commercial terms in the West Razzak and East Kanayes concessions, potentially extending the economic life of the Aghar fields and enabling more efficient reserves depletion.

Apex’s total budgetary commitment to exploration, development, and production operations in Egypt during 2024 exceeds $100 million, encompassing operating and capital expenditures for the work program.

Thomas Maher, Apex’s President and CEO, expressed satisfaction with the successful integration of the six operated concessions and personnel following the transaction with IEOC. He attributed Apex’s continued growth in production and reserves to the dedication of the Apex and PetroFarah teams, partners, contractors, and vendors.

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