Our newest and least mature exploration prospect is the Exploration and Production Sharing Agreement (EPSA) for the Al Ghubar / Qarn Alam License onshore Oman (Block 64 EPSA). The license includes 955,600 acres in which we have a 100% working interest during the exploration phase, with Oman Oil Company retaining the option to back-in for up to a 20% interest if natural gas is discovered.
The Oman Ministry of Oil & Gas created Block 64 to stimulate additional exploration for non-associated gas and condensate in an area where Petroleum Development of Oman is currently producing oil. Oman, like many nations in the Gulf region, is attempting to discover and develop natural gas to generate power for industrial diversification. Given the global supply and demand fundamentals for natural gas and oil, it makes sense for Oman to use domestic natural gas, which is less costly than oil on an energy-equivalent basis, to power non-oil industry while maintaining oil exports.
Our current focus in this prospect is to advance our understanding of the block?s geology and potential. We have conducted geological studies and reprocessed 1,000 square kilometers of existing 3-D seismic data for pre-stack depth migration. We anticipate we will be able to high-grade drilling locations with the highest potential and begin drilling in late 2011.