(Recasts, adds detail from Lansdowne, Island statements)
LONDON (Thomson Financial) - Lansdowne Oil & Gas Plc. said it has granted a
farm-in option to Island Oil and Gas Plc.'s Island Expro Ltd. for a number of
part blocks in the prospective Old Head gas trend in licence 4/07, in the Celtic
Sea offshore Ireland.
Under the option terms, Island will acquire a seismic survey of about 100 km
of 2D data over the area and will have the right to carry out the drilling and
testing of a farm-in well in the area.
The option extends up to Dec. 31, 2008, and if exercised, the well is
expected to drill before July 31, 2010, depending on rig availability.
Should the option be exercised, Island will become the operator and acquire
a 58 percent interest, while Lansdowne retains the rest.
In a separate statement, Island said it believes there is additional
potential at Old Head for low risk gas prospects.
Island CEO Paul Griffiths said that the company's studies in the area
indicated that it had "the potential to contain material gas resources that,
with synergies created by the development of infrastructure at Old Head, may
lead to early development and increased near-term cash flow if successfully
drilled."
Island added that its joint venture partners on licence 4/05 (the 'Old Head
of Kinsale'), Valhalla Oil and Gas Ltd. and Encore Oil Plc., will be offered a
pro-rata share of the option agreement, which, if exercised, would reduce
Island's net interest in the area to 38 percent.
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