Pharos Energy has received provisional approval from the Egyptian General Petroleum Corporation’s (EGPC) main board to an amendment of the fiscal terms of its El Fayum Concession, which is now subject to the approval of the Egyptian government
Under the new terms, the Cost Recovery Petroleum percentage will be increased from 30% to 40%, allowing Pharos a significantly faster recovery of all its past and future investments.
In return, Pharos has agreed to
• Waive its rights to recover a portion of the past costs pool (US$115mn) and
• Reduce its share of Excess Cost Recovery Petroleum from 15% to 7.5%
Work for phase 1b water flood programme in El Fayum has commenced, utilising the funds raised in the equity placing earlier this year.
Ed Story, president and CEO, commented, “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 US$5.7/bbl 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.”
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