Sale of Working Interests in Zarghun South and Nareli Block

CALGARY, Alberta, Feb. 01, 2024 (GLOBE NEWSWIRE) -- Jura Energy Corporation ("Jura" or the "Company") announced today that its wholly owned operating subsidiary Spud Energy (Pty) Limited (“Spud”) has entered into agreements with its joint venture partner Mari Petroleum Company Limited (“MPCL”) for the sale of Spud’s 40% working interest in the Zarghun South concession and 27.55% working interest in the Nareli Block in Pakistan. MPCL is the operator of both assets. Jura’s management is of the considered view that Spud should exit from Zarghun South as the field is approaching its economic limit in which case significant abandonment and reclamation obligations would be triggered, unless further successful in-fill drilling is undertaken. Further, Jura anticipates significant near-term cash calls related to both the Zarghun South and Nareli assets for which funding is not readily available. The transactions remain subject to regulatory approval in Pakistan as well as customary closing conditions, and are anticipated to close near the end of Q2 2024.

Zarghun South

Spud is a party to, among other related agreements, the Zarghun South Development and Production Lease dated September 16, 2004 among the Government of Pakistan (the “GoP”), Spud, MPCL and the other joint venture partners (the “Zarghun South Lease”), as amended and supplemented. Spud has a 40% Working Interest in the Zarghun South Lease under the November 30, 1994 Bolan Petroleum Concession Agreement. It covers an area of 124.22 square kilometers and is located in the western part of the Sulaiman Fold and Thrust Belt of the Middle Indus Basin in Pakistan and is located near the gas demand center of the city of Quetta.

Spud will assign its entire 40% working interest in and under the Zarghun South Lease to MPCL (the “Zarghun South Assignment”) with effect from November 1, 2023, subject to the GoP’s approval and other customary closing conditions, pursuant to a farm out agreement and deed of assignment between Spud and MPCL dated January 30, 2024. In consideration for the assignment of Spud’s 40% working interest, MPCL agreed to assume all present and future obligations of Spud related to the Zarghun South Lease.

The impact of the Zarghun South Assignment on Jura will be as follows: the current production at Zarghun South is approximately 3 million cubic feet per day (1.2 MMcf/d net to Spud). Spud’s monthly revenue from Zarghun South is approximately US$225,000, and after deducting operating costs and royalties, the net monthly cashflow to Spud is approximately US$20,000. As at December 31, 2022, Zarghun South had proved plus probable reserves of 3.197 billion cubic feet (1.279 Bcf net to Spud) with a net present value of US$3.4 million. However, unless further successful in-fill drilling is undertaken, the Zarghun South field is expected to reach its economic limit in early Q2 of 2024, and the current estimated abandonment cost is approximately US$16 million (US$6.4 million net to Spud).