Asset A&D

EOG Farms in to Tethys Oil's Oman Block 49

By Shivangi Jain
November 11, 2020
2 minutes read

U.S.-based independent EOG Resources Ltd. has entered into an agreement with a wholly-owned subsidiary of Stockholm-headquartered Tethys Oil AB to acquire a 50% working interest in Block 49 located onshore in the Rub al Khali basin in Oman.

Under the terms of the deal, EOG will acquire the interest and access to data from several thousand-line kilometers of 2D seismic grids, two recently acquired seismic surveys (2D and 3D), and nine exploration wells plus additional geotechnical studies and report, in exchange for refunding all costs incurred on the block and funding the cost of drilling the Thameen-1 exploration well (up to a combined amount of U$15 million).

EOG will also have an option to increase its ownership interest in the block to 85% for any operation relating to unconventional resources and take over the operatorship, subject to satisfactory fulfilment of initial exploration phase work commitments. If EOG exercise its option, Tethys Oil would retain a 15% interest in the block and the companies would retain 50% each of any operations relating to conventional hydrocarbon resources.

Block 49 covers an area of 15,439 sq. km on the southern edge of the Rub al Khali basin and on the eastern flank of the Ghudun Salt basin located in Dhofar Governate. The block primarily targets the Hasirah formation and includes the Thameen prospect, which was identified in 2019 pursuant to the processing and completion of the first phase of the seismic interpretation in H2-2019. Nine wells have been drilled within the block, some of which encountered oil shows, including the first well ever drilled in Oman in 1955 (Dauka-1). Work plans on the block includes the drilling of the Thameen-1 well (in December 2020) to a depth of 4,000 m to evaluate three potential reservoir targets.

“We are excited to partner with Tethys to evaluate an oil-rich basin for both conventional and unconventional potential. This agreement expands EOG’s footprint in Oman which also includes Block 36, and provides us with an attractive opportunity to explore a basin with significant potential upside for the company,” said William R. Thomas, Chairman & CEO of EOG.

Houston-based EOG is engaged in the exploration, production and development of oil and natural gas properties in Texas, New Mexico, Oklahoma, North Dakota, Utah and Wyoming in the United States, and also has international operations in Canada, China, Trinidad & Tobago, and the UK. Tethys Oil is currently engaged in exploration, development, and production operations in Oman, Lithuania and France.

The completion of the transaction is subject to customary closing conditions, including the receipt of Omani government approval.

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