Fastnet Exercises of Option over New Interest in Morocco

Source: www.gulfoilandgas.com 11/7/2012, Location: Africa

Fastnet Oil and Gas plc, the listed E&P company focussed on near term exploration acreage in the Celtic Sea and Africa, is pleased to announce that, through its wholly owned subsidiary Pathfinder Hydrocarbon Ventures Limited, it has agreed to exercise its option over a 50% participating interest in a proposed oil and gas exploration licence application onshore Morocco (the "Merada Licence Application"). The Merada Licence Application is subject to approval and execution by the Office National des Hydrocarbures et des Mines("ONHYM").

Merada Licence Application
Fastnet's option to participate in the Merada Licence Application was acquired as part of its acquisition of Pathfinder Hydrocarbon Ventures Ltd, which was announced on 18 July 2012.

The Merada Project Area contains four exploration permits (Merada I, II, III and IV) in the Guercif Basin in northeast Morocco covering an area of 7,269 km2. Studies by ONHYM in 2004 have shown that the proposed Merada Project Area is prospective for new hydrocarbon plays including biogenic gas in the Miocene, oil in the Jurassic and thermogenic gas in the Triassic.

The Miocene biogenic gas play is well developed in the Rharb Basin in Northeast Morocco, west of the proposed Merada Project Area, where Circle Oil Plc executed highly successful drilling programmes in the Sebou and Oulad N'zala blocks in 2008/9 and 2010/11, during which 10 gas discoveries were made from the drilling of 11 wells.

Proposed work programme for the Merada Licence Application
On the basis of the terms that have provisionally been agreed with ONHYM (the "Merada Draft Petroleum Agreement"), there will be an initial three year exploration period ("Initial Exploration Period"). The Merada Draft Petroleum Agreement requires that a minimum work programme should be undertaken during the Initial Exploration Period. This will include reprocessing and interpretation of 1,000 km of existing 2D seismic data plus a number of desktop studies. Dependent on the outcome of this work, Fastnet and Drillbit Exploration must also either acquire, process and interpret a minimum of 250 km of new 2D seismic data or drill one well to a minimum depth of 2,000 metres or to the top of the Jurassic, whichever is shallower. The minimum exploration commitment is expected to be US$3.65m for the Initial Exploration Period of which Fastnet's share would be 50%.

Cathal Friel, Chairman of Fastnet, commented:
"I am very pleased to announce the exercise of our option over this prospective onshore block in Morocco. With Merada in place, we have potential exposure to some high impact, near term and relatively low risk exploration wells which should allow us to give our shareholders material upside potential contained within the licence area.

"Following further evaluation of the seismic data and a site visit to look at the reservoir, our management team is confident that a much larger basin centre Tortonian fan play is present in the block than previously anticipated.

"Morocco is one of our key jurisdictions and we are very much looking forward to working with ONHYM as we mature the licence area for exploration drilling."


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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