Contact Us
Investor Information

Oman

Note: updated as of June 2009

During January 2009, the Corporation was awarded Block 55, an onshore oil and gas concession in the Sultanate of Oman that covers approximately 7,564 square kilometers (1,869,105 acres).

Within Block 55 four exploratory wells have been previously drilled, including the Ameeq-1, which is a discovery well that may contain reserves in the range of one to ten million barrels of oil. The three other exploratory wells previously drilled on Block 55 were determined to be exploratory dry holes, with oil shows encountered in two of them.

Location Map - Click to enlarge

Adjacent to and within 20 kilometers of Block 55, there are approximately 27 discoveries and producing fields, of which 12 are currently producing oil and gas, with one hundred fifty eight (158) producing wells.

In addition, OilEx, who operates an adjacent block, has reported a significant oil discovery near the southern border of Block 55. There is an existing infrastructure of oil and gas pipelines on blocks adjacent to the western side of Block 55.

Other oil and gas operators in the Sultanate of Oman include PDO, EnCana, Hunt Oil, Reliance Industries, MOL, Sinopec and Occidental.

Terms of Exploration and Production Sharing Agreement (“EPSA”) includes:

An initial three-year exploration period and a commitment to spend a minimum USD$25.5 million covering the following:

• 3D seismic: acquire 300 km; reprocess 133 sq km
• 2D seismic: acquire 500 km, reprocess 4,000 sq km
• Drill four wells

At Epsilon’s option, the initial exploration period may be extended an additional three years provided the Corporation commits spending USD$28.5 million covering the following:

• Acquire 600 km of 3D seismic or 500 km of 2D seismic
• Drill three wells

Allocation of crude oil production:

• 40% of crude oil production is designated for cost recovery.
• 60% of crude oil production is designated as profit oil and will be allocated as follows.
• Up to 10,000 bbls/d: 80% government of Oman; 20% Operator
• 10,000 to 20,000 bbls/d: 82.5% government of Oman; 17.5% Operator
• Over 20,000 bbls/d: 83.5% government of Oman; 16.5% Operator

Epsilon Energy is the official operator of Block 55 and is considering bringing in industry partners to assist in the exploitation of this concession. Epsilon Energy does not expect to spend any significant amount of capital toawards this concession until 2010 or later.

In late March 2009, a royal decree (No. 15/2009) was issued by his Majesty Sultan Qaboos bin Said approving the agreement between Oman's government and Epsilon Energy International Ltd. regarding Block 55. Article 1 of the decree approved the EPSA and article 2 states the decree takes effect from its date of issue.