ArabFinance: The Oil Ministry signed oil exploration and production agreements worth $506 million with Canadas Transglobe and London-based Pharos Energy, a statement by the ministry announced.

Under the deals, both companies will drill a total of 12 new wells.

The agreements include a 3.5-year extension to Pharos Energys exploration license in the El Fayum concession in the Western Desert.

The extension agreement includes an additional obligation on the contractor to drill two exploration wells and acquire a 3D seismic survey in the northern area of the license.

The extension agreement will raise the London-based companys cost recovery percentage, allowing it to use 40% of gross revenues from all its current and future Egyptian concessions to recover costs, up from 30% previously.

Pharos will waive its rights to recover a portion of the past costs pool $115 million. The company will also cut its excess cost recovery petroleum share in half to 7.5%.

The signing of the agreement was a key precondition for Pharos planned sale of a 55% working interest in each of its El Fayum and North Beni Suef concessions to IPR Energy Group subsidiary IPR Lake Qarun.

The c. $63.4 million transaction is expected to be completed during the first quarter of 2022, Pharos said when it announced the agreement last year.

Meanwhile, Transglobe signed a new agreement that will consolidate its three existing concession agreements in the Eastern Desert (West Gharib, West Bakr, and North West Gharib).

According to the agreement, the Canadian company will spend around $200 million over the coming 15 years.

The amount includes a minimum $50 million the company committed to spending over each five-year period for the 15 years of the primary term, as well as an annual $10 million payment each year for the next five years.

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