Last week, Egypt’s Oil Ministry said that the country has signed three oil and gas exploration agreements with U.S. energy company Apache Corporation (APA). The deals, which involve digging a total of 14 wells in three areas of Egypt’s Western Desert, are valued at $30 million. Apache would work in partnership with state-run Egyptian General Petroleum Corporation (EGPC) and Egyptian energy firm Tharwa Petroleum Company.

The first of the agreements is worth $15 million and calls for Apache to drill six oil and gas wells in Western Desert’s Siwa Oasis. The second and third deals are valued at $7.5 million each and entail digging four wells in Gharb Ghazalat and another four in Saloum, both in the Western Desert.

We believe that the latest initiatives, if successful, will boost Apache’s growth prospects in Egypt by adding to its existing interests in the country. Apache is the largest foreign operator in the Western Desert and has already made a string of discoveries in the region this year.

Founded in 1954, Houston-based Apache Corporation is one of the world’s leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Approximately 61% of the company’s proved reserves and 54% of its production comes from North America, where its operations are focused in the Gulf of Mexico, the Gulf Coast, East Texas, the Permian basin, the Anadarko basin, the Western Sedimentary basin of Canada and internationally.

We currently rate Apache Corporation shares as Neutral.
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