Incremental takes bigger slice of Turkey project

INCREMENTAL Petroleum has bought an additional 30% equity in the Edirne gas project in Turkey’s Thrace basin for $US5.5 million ($A7.1 million) from partner Otto Energy.

The two Perth-based juniors said the purchase would take Incremental’s stake in the project to 45%. Incremental is currently earning 15% through a farm-in agreement with Otto by funding a $A3 million work program.

The joint venture has already announced two gas discoveries in the permit with estimated reserves around 2 billion cubic feet of gas to date.

Under the deal, Incremental will also acquire a 60% interest in two other exploration licences in the basin.

Incremental chairman Chris Cronin said the acquisition is consistent with the company’s strategy of building a portfolio of projects in the Middle East and especially Turkey.

“This gives us exposure to strong and stable European gas prices,” Cronin said.

"It is located in the highly industrialised western sector of Turkey where almost all gas demand is currently satisfied by expensive imports from Russia and it allows synergistic benefits through sharing staff and equipment with the company’s other production project at the Selmo oil field in southeast Turkey."

The company said there was substantial potential upside from further exploration in the permit and the JV would be drilling further wells this year. It will also shoot a 3D seismic survey over parts of the licence area and is undertaking preliminary engineering studies for production facilities.

Incremental said it is conducting a market survey in preparation for commercial declaration of the project, expected later this year.

The company said most of its exploration costs would be recovered through re-imbursement of the secondary royalty levied by the Government on oil production at its Selmo field, making the acquisition “additionally attractive”.

Following the acquisition, interests in the Edirne licence will be Incremental (45%), Otto (35%), Petrako (10%) and Merty (10%).