Falkland Oil and Gas Limited Change to drilling programme (9646J)
April 13 2015 - 2:00AM
UK Regulatory
TIDMFOGL
RNS Number : 9646J
Falkland Oil and Gas Limited
13 April 2015
13 April 2015
Falkland Oil and Gas Limited
("FOGL" or the "Company")
Change to drilling programme
Falkland Oil and Gas Limited ("FOGL"), the exploration company
focused on its extensive licence areas to the North, South and East
of the Falkland Islands, announces that Noble Energy ("Noble") and
its joint venture partners FOGL and Edison International ("Edison")
have elected to defer a potential second well in the South and East
Falkland basin.
The joint venture partners have concluded; having taken into
account a number of factors, that the optimum course of action is
to defer the drilling of a second well in the southern basin. In
these circumstances FOGL was amenable to a proposal from Noble,
that in order to fulfil the drilling commitment, they should
utilise the contracted drilling slot to drill a well in the North
Falklands Basin.
This revised drilling programme will mean the joint venture
partners:
-- Have more time to fully assess the Humpback results, and
given encouragement, plan further exploration and appraisal
wells
-- Can potentially take advantage of lower future drilling costs
-- Will be able to complete the technical assessment of the
Scharnhorst and Starfish prospects and determine whether they are
suitable future drilling targets in light of the Humpback
results.
-- Additionally, it will also result in FOGL being in a stronger
financial position at the end of the current drilling
programme.
Noble, Edison and FOGL remain fully committed to exploration in
the South and East basin and still firmly believe in its
prospectivity. The well on the Humpback prospect is considered by
the joint venture partners to be the prime 'play opening' well. It
is an important test of concept, in terms of evaluating the
Cretaceous deepwater fan play and the presence of oil within the
Fitzroy sub-basin. Humpback is located near a cluster of similar
prospects totalling over one billion barrels of oil. The operator
estimates that the Humpback prospect contains between 250 and 650
mmbbls of gross prospective resources (un-risked). If the initial
drilling results are encouraging, the joint venture partners will
look to fully appraise Humpback and drill other similar prospects
within the play area. Such further exploration and appraisal
drilling would be part of a future campaign, with wells on either
Scharnhorst and/or Starfish also possibly forming part of such a
programme.
This decision does not impact any existing agreements between
FOGL and Noble. In the event that another exploration well is
drilled after Humpback, within the joint venture's licence area,
FOGL would still retain a partial carry of the drilling costs under
the terms of the Noble farm out agreement.
FOGL is fully funded for the firm four wells and will be left in
a stronger and more sustainable financial position as a result of
this decision
Following this agreement, the revised drilling schedule is:
1. Zebedee: FOGL 40.0% interest (successful well result announced 2 April 2015)
2. Isobel Deep: FOGL 40.0% interest (in progress)
3. Humpback: FOGL 52.5% interest (estimated commencement in May 2015)
4. Jayne East: FOGL 40.0% interest
5. Chatham: No FOGL interest
6. Rhea: No FOGL interest
Tim Bushell, CEO, FOGL, commented:
"We are very satisfied with this alternative plan for the
exploration of the South and East Falklands basins which provides
more time to fully utilise the extensive 3D seismic dataset,
assimilate the results of the Humpback well and take advantage of
the lower rig and services costs that may prevail.
"The Board of FOGL considers that the actions taken are in the
best interests of shareholders. We believe that disciplined capital
management is crucial in the current oil price environment and this
decision leaves FOGL in a stronger financial position.
"FOGL has retained significant exposure to a very exciting four
well drilling programme which commenced with a significant oil
discovery at the Zebedee prospect. Positive results from any of the
following wells could add significantly to a growing reserve
base".
- Ends -
For further information:
Falkland Oil and Gas Limited
Tim Bushell, Chief Executive +44 (0) 20 7563 1260
RBC Capital Markets (Nominated Advisor and Joint Broker)
Matthew Coakes / Daniel Conti +44 (0) 20 7653 4000
Numis Securities Limited (Joint Broker)
John Prior / Ben Stoop / Paul Gillam +44 (0) 20 7260 1000
FTI Consulting
Ed Westropp / George Parker +44 (0) 20 3727 1000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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