121
in Egypt represented the Group’s gas reserves in Abu Sennan, and the remainder represented the Group’s oil reserves
across its Egyptian assets. GCA also reports that the Group’s Egyptian assets include 2.4 mmboe of 1C (low estimate),
10.4 mmboe of 2C (best estimate) and 24.1 mmboe of 3C (high estimate) contingent oil resources on a working interest
basis as at 31 May 2014, all of which are located in the Burg El Arab block.
In Egypt, the Group currently has oil production from Area A, ERQ, Burg El Arab and Abu Sennan. During the first
three months of 2014, the Group’s assets in Egypt produced 15,514 average boepd on a working interest basis,
representing approximately 69.0% of the Group’s average daily working interest production. The exit rate for Egypt for
the six months ended 30 June 2014 was 17,745 boepd. The following table sets out the Group’s average daily oil
production in Egypt for the periods indicated on a working interest basis.
Year ended 31 December
Three months ended 31
March
2011
2012
2013
2013
2014
Asset
(boepd)
ERQ ............................................
3,896
6,672
8,876
6,250
9,695
Area A.........................................
4,210
4,434
4,351
3,959
4,178
Burg El Arab...............................
423
1,144
882
837
951
Abu Sennan.................................
-
204
445
331
690
Total
...........................................
8,529
12,454
14,553
11,377
15,514
Production assets
ERQ
The Group’s most significant producing asset is the ERQ licence area. ERQ covers a developed area of 229 km
2
and is
located in the Alamein Basin of the Western Desert. The Group holds a 49.5% working interest in the ERQ licence, held
through the PSC entered into with EGPC. The Group’s working interest was acquired through its purchase of Oil Search
(MENA) Limited in 2008. Its JV partner is ENAP Sipetrol, which holds a 50.5% working interest and is the operator of
the PSC. The JV operates through Petroshahd, a private company incorporated in Egypt.
Development leases with a 20-year term have been granted over nine fields discovered within the ERQ PSC area: Shebl,
Shebl East-1, five mature oil fields (Shahd, Ghard, Rana, Rana SE, and Shahd SE) and two recently discovered oil fields
(Al Zahraa and Diaa). The development leases expire at various dates between 2027 and 2031, each with an option for a
five year extension subject to approval from the Egyptian Ministry of Petroleum. The seven-year exploration period
covering the PSC area outside these nine fields expired in September 2011.
The first commercial discovery in ERQ was the Shahd 1 well in November 2006, which began commercial production in
December 2007. There are currently 17 producing wells from eight of the development leases. ERQ produced 9,695
average bopd on a working interest basis during the first three months of 2014, representing approximately 43.2% of the
Group’s average daily working interest production, and which represented an increase of 55.1% as compared to 6,250
bopd in the first three months of 2013.
In 2008 and 2010, oil was discovered in Shahd SE and Shebl fields, indicating a gross initial flow rate of 1,500 bopd and
600 bopd respectively. In 2011, four wells were drilled: Shahd-2 ST2, Shahd SE-4, Shahd SE-5 and Rana-2 indicating an
initial flow rate of approximately 4,300 bopd, 1,000 bopd, 5,000 bopd and 1,400 bopd, respectively. In 2012, three of the
14 blocks in the Shahd SE development lease were relinquished, as they had not produced oil or gas since the inception
of the lease, and the JV partners entered into a new agreement with the EGPC under which they retained the rights to the
remaining blocks and committed to drill a deep Jurassic commitment well within two years. Shahd SE-7, the deep
Jurassic commitment well, was drilled in 2013 and did not result in a discovery. An additional exploration well, Diaa-2,
was spudded in December 2013 and completed during the first quarter of 2014. Although Diaa-2 did not encounter any
hydrocarbon shows in the exploration target, as at 31 March 2014 the well was producing from the already discovered
