The company said its al-Amir SE 21 development well ran through a net 23 feet of oil. The company said the well flowed at a preliminary rate of 3,000 barrels of oil per day and 3.2 million cubic feet of associated gas.

Once the drilling rig is moved from the location later this year, the company said the well would be placed into production.

Paul Welch, Sea Dragon's chief executive officer, said the entire field, located west of the Gulf of Suez, should be able to produce at a peak rate of 11,500 barrels of oil and 12 million cubic feet of associated gas per day.

Sea Dragon is the minority partner in the concession, alongside operator Vegas Oil and Gas and Circle Oil PLC.

Sea Dragon's net production from Egypt is 1,680 barrels of oil equivalent per day.

Egypt holds an auction for oil and gas basins in July.

Transocean announces plans for North Sea spinoff
Zug, Switzerland (UPI) May 6, 2013 - Drilling contractor Transocean said it planned to create a subsidiary that will take eight rigs to conduct operations in the British waters of the North Sea.

Transocean said the new Caledonia Offshore Drilling Co. should be established during the second half of the year. The spinoff will consist of eight rigs, which have day rates ranging from $300,000 to around $400,000, bound for deployment in the North Sea.

"The U.K. North Sea remains an important market for Transocean and the company is committed to maintaining its presence in the region," the drilling contractor said in a statement Monday.

The rigs are capable of working in waters in a range of 1,000 to 1,800 feet deep. Drilling can target reserves as much as 25,000 feet below the sea floor.

"Caledonia is expected to have a focused approach to assets and operations in the UK North Sea and it will continue to provide best-in-class service to customers," Transocean said.