Benzinga | Dec 27, 2021 09:11AM EST

APA Corporation Announces Ratification of Modernized Production Sharing Contract In Egypt

* Consolidates 90% of gross production into a single concession and refreshes existing development lease terms for 20 years;

* In anticipation of the new agreement, the APA-Sinopec JV more than doubled its Egypt rig count to 11 in 2021; planning a further increase to 15 rigs in 2022;

* APA-Sinopec JV expects to increase gross capital investment by approximately $235 million in Egypt during 2022; projects a 13% to 15% year-over-year increase in Egypt gross oil production;

* Consolidated concession will have a 40% cost recovery limit and a fixed profit share rate of 30% for all APA-Sinopec JV production;

* APA-Sinopec JV will be entitled to recover nearly $900 million of backlogged costs over a five-year period starting from April 1, 2021, the effective date of the new agreement; and

* APA-Sinopec JV will pay a signature bonus payment of $100 million to EGPC.