Tethys Oil AB, through subsidiary Tethys Oil Oman Onshore Ltd., will pay up to $9.5 million in a cash and carry farm-in agreement with Biyaq Oil Field Services for 20% interest in the exploration and production license covering Block 56 onshore Oman.
Block 56 covers 5,808 sq km in southeastern Oman some 200 km south of Blocks 3 and 4. Eleven wells have been drilled on the block, three by operator Medco Arabia Ltd. All but one of the total wells drilled have encountered oil or oil shows. None have been determined to be commercial. A work program to flow test up to three wells is being prepared.
The block lies at the intersection of different geological provinces including the South Oman salt basin. It offers exploration potential in multiple play concepts, both proven and unproven, Tethys Oil said.
The initial 3-year exploration and production-sharing agreement for the block, signed in November 2014, was extended to December 2020. A second exploration phase, ending in December 2023, is optional.
Interest in Block 56, upon completion of the transaction, will be operator Medco Arabia Ltd. 50%, Intaj LLC 25%, Tethys Oil 20%, and Biyaq 5%.
