TAG Oil Awarded Petroleum Services Agreement for Development of Abu Roash "F" Reservoir in Southeast Ras Qattara Concession

Core Viewpoint - TAG Oil Ltd. has received approval for a petroleum services agreement to develop the unconventional Abu Roash "F" reservoir in Egypt's Southeast Ras Qattara concession, marking a significant step in the company's expansion in the region [1][10]. Company Overview - TAG Oil is a Canadian-based international oil and gas exploration company focused on operations in the Middle East and North Africa [10]. Development Agreement - The petroleum services agreement (PSA) was awarded following a competitive bidding process by Egypt's Ministry of Petroleum and Mineral Resources [2]. - The PSA will take effect upon the execution of the definitive agreement and the posting of a US$100,000 performance letter of guarantee [2]. Concession Details - The Southeast Ras Qattara concession covers approximately 2,000 km² (512,000 acres) and has extensive subsurface data, including full 3D seismic coverage and existing wellbores [3]. - The area has a history of conventional oil production from deeper formations that intersect the ARF reservoir, with TAG Oil gaining access to several shut-in wells for low-cost re-entry opportunities [3]. Reservoir Potential - TAG Oil has conducted detailed technical studies indicating that the ARF reservoir is a low-permeability carbonate formation with significant development potential [4]. - The company believes that the reservoir has a high likelihood of commercial success using proven horizontal drilling and hydraulic fracturing technologies, which have shown positive results in similar projects [4]. Development Strategy - The development of the ARF will occur in two phases: a two-year firm commitment evaluation period followed by an optional development period [6]. - The initial phase will focus on piloting the development concept, with the option for full-scale commercial development based on production results and cost analysis [6][8]. Economic Terms - Under the PSA, ENPEDCO will pay TAG Oil a sliding-scale service fee based on production volumes, ranging from 55% to 48% of gross project revenue, compensating TAG Oil for 100% of capital and operating expenditures [9].