London-listed Circle Oil has farmed into a 40% stake in Egypt’s North-West Gemsa Block under a deal with local company Vegas Oil & Gas.
The concession covers 400 square kilometres about 300 kilometres south-east of Cairo in the Suez basin.
Under the deal, Circle will contribute to the cost of the Amir SE-1 exploration well, that will target Nubian sandstones at 12,870 feet. Drilling on the prospect, which Vegas Oil estimates contains 100 million barrels of oil, is due to start next month, Circle said.
Vegas operates the concession, which is valid for a further two and a half years, with a 50% stake, while UK-based Premier Oil holds 10%.
The deal is subject to approval by the Egyptian authorities.