Maha Energy AB enters into a Farmout Agreement with Mafraq Energy LLC for Block 70 in Oman

Maha Energy AB (publ) (“Maha” or the “Company”), through its wholly owned subsidiary Maha Energy (Oman) Ltd., has entered into an Agreement with Mafraq Energy LLC for Maha to reduce the Participating Interest in the Block 70 Exploration and Production Sharing Agreement (“EPSA”) in Oman from 100% to 65%. Maha will continue to be the Operator of the Block. The Agreement is subject to Government approval in Oman.

Maha has decided to reduce its working interest in the onshore oil-bearing Block 70 in Oman by bringing in a strategic Omani partner. The Agreement requires Mafraq Energy LLC to reimburse Maha for their prorated share of all past costs including the signature bonus. Mafraq Energy LLC will also be required to pay their share of all future expenditures on Block 70.

Jonas Lindvall, Maha’s CEO said: “We are delighted to have Mafraq Energy LLC join us on Block 70. Mafraq Energy LLC brings extensive experience of the Mafraq field and the surrounding areas in Oman. The fact that Mafraq Energy joins us is perhaps the best evidence yet of the future potential of the Mafraq field.”  

Talal Al Subhi, Director of Mafraq Energy LLC said: “We are pleased and honoured to join Maha Energy to commercialize Oman’s national resources. The farm out arrangement is also completely aligned with the realisation of the Oman national 2040 vision’s “Growing the Private Sector”, and we are proud to be doing our part.”

Immediate plans for the Mafraq oil field include drilling six wells to obtain important reservoir information to assist in developing a full Field Development Plan. The Gulf Drilling rig 109 was recently contracted for this drilling.  Anticipated mobilisation of the drilling rig is scheduled for October this year.

About Mafraq Energy LLC
Mafraq Energy LLC is a private Omani company whose founders come with an extensive track record in multiple business sectors.  Sister Companies to Mafraq Energy LLC are active in the upstream oil and gas service sector, the downstream distribution and service sector, as well as manufacturing capabilities in the telecommunication service sectors.

About the Mafraq  field
Maha was successful in securing Block 70, which contains the Mafraq heavy oil discovery, in a 2019 – 2020 Government bid round. The Mafraq structure is a delineated heavy oil field that was extensively tested by Petroleum Development Oman (PDO) in 1988 and 1991. The field tested 15,700 barrels of 13° API oil over a period of 24 days using a Progressive Cavity Pump (PCP) from a single well.  The test well, MF-5, tested 100% oil for less than a day after which water production stabilized at around 25%.  It is unknown why PDO did not develop the field at the time, but it is likely that prevailing commodity prices (US$ 18 – US$ 20 per barrel) and access to other lower cost opportunities precluded Mafraq as a development option at the time.