In a corporate update on Tuesday, Upland Resources (LSE:UPL) revealed it has received a number of unsolicited approaches for farm-ins regarding the Saouaf Licence. The company was formally awarded the onshore license in December last year, and Upland said it sees this early interest from oil companies as ‘further validation of the potential of its new asset’.
The Saouaf Licence, located in northern Tunisia, contains thirteen identified prospects and leads, and is estimated to hold recoverable resources of around 2 trillion cubic feet (TCF) of gas. The license also includes the existing Dekrila discovery and Bou Dabbous Flower structure which are estimated to contain 227 billion cubic feet (BCF) and 813 BCF of recoverable resource respectively. The Dekrila discovery was made in 1955 before any gas infrastructure was in place to utilize the resource. Today there are a number of gas pipelines in the vicinity including the large diameter Transmed pipeline.
Potential oil resources are also in play. The license area includes the SNJ prospect, where the SNJ-1 well demonstrated good oil shows. The area remains largely untested but its estimated SNJ could contain recoverable resources in the region of 42 million barrels of oil (MMbbl).
Upland will work on the license with ETAP the Tunisian state oil company in a 50:50 joint venture. As part of the deal, Upland will front all exploration and appraisal costs with ETAP reserving the right to take up to a 50pc interest. Over an initial two-year license period, Upland will conduct exploration work including the acquisition of new 2D seismic and reprocessing of existing data.
Meanwhile, Upland’s subsidiary Upland Resources (UK Onshore) Limited awaits the results of its application for acreage in the North Sea. The company expects to hear if it has been awarded licenses in this quarter.
Steve Staley, CEO of Upland Resources, said: “Our shareholders will know that we have not been vociferous in the media over the past weeks – but we have been busy making good progress on all fronts and I am pleased to be able to provide this update now. We are encouraged by industry recognition of the potential of the Saouaf Licence and that ETAP are happy to help us find mutually beneficial investments. Good progress continues to be made in Sarawak and we have used the knowledge we have gained in our work on the UK’s Inner Moray Firth to guide us to what we believe is attractive North Sea acreage.”