Pharos Energy and the Egyptian General Petroleum Corporation (EGPC) have agreed to amend the terms of El Fayoum Concession in the Western Desert, which will raise Pharos’s cost recovery petroleum percentage from 30% to 40%, a relevant press statement cited.
The agreement still awaits final approval from the Egyptian government. If approved, Pharos stated that it will allow faster recovery of all its past and future investments. Upon approval, Pharos will waive its rights to a portion of the past costs pool estimated at $115 million in addition to reducing its share of excess cost recovery petroleum from 15% to 7.5%.
Per the statement, the company has begun Phase 1B of the waterflood program in El Fayum.
“The improved cost recovery terms mean past and future investments in El Fayum can be recovered thanks to a significant increase in Pharos’ total share of gross revenues. Together these new fiscal terms mean an improvement of up to $5.7/barrel in the breakeven price. We appreciate the cooperation and commitment of the leadership team at EGPC and the support that we have received from the Egyptian Ministry of Petroleum and Mineral Resources, we look forward to working with them to realize the significant mutual benefits of these new arrangements,” Ed Story, President and CEO of Pharos Energy, commented.