The Israeli-owned oil and gas exploration company Cyprus Opportunity has entered the U.S. oil drilling and production having announced the purchase of ten oil wells in North Dakota. The company intends to perform two development drillings this year and two more next year, when the cash flow from oil sales is expected to begin.
According to the agreement, the seller, Thurston Energy, which prior to the signing of the transaction holds about 94% of the rights to the oil fields, will transfer 75% of its rights to Cyprus Opportunity and its partners, so that it keeps 25%. The company will hold 3% of the license, Israel Opportunity will hold 67% of the license, and Radian Partners will hold 5%. In return for the purchase of rights, the partners have paid about $2.4 mln.
North Dakota is considered oil rich. Oil production started in this state as early as 1951, and as of today, about 1 million oil barrels are produced per day. In addition, the state has advanced infrastructures in the area of oil exploration, production and transfer, and official regulation. Oil has been produced in the past within the license areas purchased.
According to a 2013 report prepared by the USGS American geological institute concerning Williston Basin, most of which lies within the area of North Dakota, and where the ten properties are located, the yet-undiscovered oil reserves are estimated at 7.4 billion barrels of oil.
Successful drillings have already been made in fields near the fields purchased, within the same target layer, Midale Nesson, which currently produce oil. In addition, as far as the partners are aware, dozens of drillings are planned for this year by other oil companies in the same area and within the same geological layer.
As part of the work plans for the field’s development and use of its potential, the partners are planning a widespread drilling campaign of about 40 onshore drillings. Ten out of these drillings will be based on re-entry into wells which already produced oil in the past, and 30 will be new production drillings. The drilling budget for new wells will be $3 mln and the budget for re-entry will be $1.5 mln. Two of the drillings are expected to commence this year and two more during the next year. In total, the partners intend to complete all drillings by 2023, among other things, depending on the oil price.
According to Dr. Rony Halman, Chairman of Cyprus Opportunity, the decline in world oil prices and the halt of projects due to funding problems have created new business opportunities for companies such as Cyprus Opportunity to expand its portfolio of properties.
“In the past year, we have explored investment opportunities for oil assets overseas and are pleased with the current cooperation in North Dakota,” he said.
C.O. Cyprus Opportunity was established in February 2012 to participate in oil and gas exploration in the exclusive economic zone of Cyprus. In July 2012, the company was the first oil and gas exploration company listed on the Cyprus Stock Exchange (CSE). On May 11, 2012, the company and AGR Energy AS jointly filed applications in the tender for the Second Licensing Round issued by the government of Cyprus, inter alia, for the Block 8 offshore deep water license. On September 28, 2014, the Company was added as a party (5%) to the application for Hatrurim License in Israel.
