Thursday, February 21 10:28:54
Irish energy prospector, Fastnet, today said it has signed a farm-in deal with Kinsale Energy, part of the Petronas group, to farm into the "Deep Kinsale Prospect" from 4,000 below the producing Kinsale Head gas field.
Deep Kinsale Sub-Area covers parts of Blocks 48/20, 48/25, 49/16 and 49/21 and Fastnet's exclusive option is confined to geological formations below 4,000 feet subsea.
Fastnet is to acquire a minimum of 500 sq. km. of 3D seismic by 31 December 2013 and is to complete geological and engineering studies.
The firm will have an exclusive option to farm in, exercisable before 30 September 2014, by starting a well on or before 30 November 2015 to test the Purbecko-Wealden reservoirs, productive in Barryroe.
The Farm-in Well is to be drilled to a provisional depth of 8,000 feet subsea;
Kinsale Energy will have the back-in option, exercisable at its discretion within a period of 30 Business Days of completion by Fastnet of the exercise of the Option, to increase its interest in the Kinsale Deep Sub-Area by 10pc, by paying for 16.667pc of the drilling and testing costs of the Farmin Well.
If there is a commercial development, Kinsale Energy will have the option to increase its working interest for no consideration, by 5pc once production exceeds 100 million barrels oil equivalent ("MMBOE"), by a further 5pc once production exceeds 150 MMBOE oil equivalent and by a further 5pc once production exceeds 200 MMBOE subject to the Kinsale Energy's working interest not exceeding 60pc in aggregate.
"We are delighted to have added an exclusive option to farm into and potentially drill the Deep Kinsale Prospect in 2014. It represents an attractive addition to our Irish portfolio as we have long held a belief that Deep Kinsale offers the potential to yield up another significant hydrocarbon discovery offshore Ireland. This belief has been further strengthened by the successful appraisal of Barryroe in 2012, which is geologically analogous to Deep Kinsale. We greatly look forward to working in close cooperation with our colleagues at Kinsale Energy, as we collectively seek to de-risk the prospect for drilling," said Cathal Friel, Chairman of Fastnet.