Genel Energy, the oil and gas giant led by former-BP frontman Tony Hayward, has agreed to buy an additional stake in an exploration block in the Kurdistan Region of Iraq.
Following the acquisition of a 23% interest in the Bina Bawi block announced in May and approved on August 3rd for $175m (through the purchase of A&T Petroleum), Genel has now revealed that it intends to buy up a further 21% from Hawler Energy for $240m, to be paid from its existing cash resources.
Bina Bawi covers an area of 240 square km and is the adjacent block to Genel's producing oil field Taq Taq. Bina Bawi-3, the most recent well on the block, encountered a gross hydrocarbon column of over 800m in the Jurassic zone and two Jurassic reservoir intervals tested separately achieved an aggregate flow rate of more than 4,000 barrels a day of light, 44- to 47-degree API oil.
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Two further appraisal wells are planned for later this year. The block as a whole is predicted to contain contingent resources of 500-1,000m barrels of oil equivalents.
"This acquisition gives us a material interest in a third major oil and gas development (alongside Taq Taq and Tawke) and reinforces Genel's leading position in the Kurdistan oil and gas province," Hayward said.
"It is consistent with our strategy of continuing to build our Kurdistan business through selective acquisitions and our ongoing exploration drilling programme," he said.
The transaction is still conditional on the receipt of approval from Kurdistan Regional Government. If approved, Genel will hold a 44% working interest in Bina Bawi, while operator OMV and KRG will keep a 36% and 20% interest, respectively.
By 14:23, shares were up 0.15% at 677p.
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