Thursday, August 14 10:35:54
Irish explorer Fastnet Oil and Gas today said it has extended its option agreement with Petronas subsidiary PSE Kinsale Energy to farm into the Deep Kinsale Prospect in the Celtic Sea.
The prospect extends from 4,000 feet subsea below the producing Kinsale Head gas field.
The revised terms of the agreement include a commitment to commence drilling of a well before December 31, 2016.
It also sees the deletion of the Kinsale Energy back-in option that had allowed Kinsale Energy to increase its interest in the Kinsale Deep Sub-Area by 10 percent by paying for 16.67 percent of the drilling and testing costs of the farm-in well.
Meanwhile, it removes Kinsale Energy's right to increase its working interest by up to 15pc for no consideration if there is a commercial development.
Paul Griffiths, Managing Director of Fastnet, said: "The new terms of the Deep Kinsale Prospect greatly improve the project economics and significantly improves materiality for Fastnet and any potential Farminee. The extension of the deadline to exercise the option and the commencement of a well works well with our timeline to complete a Farm in transaction from our ongoing process. Fastnet has considerably advanced the technical understanding and de-risked the opportunity at Deep Kinsale based on our extensive interpretation of our newly acquired 3D seismic data (2013). Fastnet has progressed potential farm in discussions with a number of industry players and we seek to close out a transaction with a potential drilling partner for Deep Kinsale and recover substantial past costs to further strengthen our already significant discretionary cash balances."
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