Dragon Oil (LON:DGO), said its offer for Block 19 in the Gulf of Suez, Egypt, has been initially accepted.
The decision is still subject to approval by the appropriate government authorities.
Dragon Oil made its bid as part of the first round of bidding for, among others, 20 exploration blocks in the Western Desert, Eastern Desert, Red Sea and the Gulf of Suez.
Block 19 East Zeit Bay (in which Dragon Oil will have a 100% interest) is located offshore in the prolific southern Gulf of Suez region. The block covers an area of 93 square kilometres and lies in shallow waters ranging in depth from 10 to 40 metres.
“The block's location in shallow waters fits well with our expertise and represents a strategic move for Dragon Oil in the country rich in hydrocarbon resources and opportunities,” said Dr Abdul Jaleel Al Khalifa, chief executive officer (CEO) of Dragon Oil, said.
A number of producing oil fields are adjacent to or near Block 19, namely East Zeit, Hilal, Ashrafi, SW Ashrafi and Zeit Bay fields. Dragon Oil plans to do seismic acquisition and analysis over an area of approximately 100 square kilometres and to drill two wells during the initial exploration period.
Shares in Dragon Oil were up 0.9% at 566.5p in late trading.