EnCore Oil and its P1655 (Block 15/21g) partners, Nautical Petroleum and Serica (the P1655 group), have agreed terms to acquire a 70 percent interest in a part of adjoining License P218 (Block 15/21a). P218 is currently operated by DEO Petroleum with co-venturers, Faroe Petroleum plc, Maersk Oil UK Ltd and Atlantic Petroleum (the P218 group). The area in P218 to be acquired includes the 15/21a-38z Spaniards/Gamma discovery well, drilled in 1989 by Amerada Hess, which flowed 2,600 bbls/day of 26 API oil on test. In consideration, the P1655 group have agreed to assign the P218 group a 30 percent interest in P1655, and have agreed to fund the cost of the first well to appraise the Spaniards/Gamma discovery. It has also been agreed that a subsequent appraisal well, if deemed necessary and approved by the partnership, would be funded on promoted terms by the current P218 partners as shown in the table below, after which funding for any further wells would be by equity share.
The first well, is expected to commence drilling in Q2 2012, subject to suitable rig availability and receipt of the necessary permitting and site survey approvals.
Blocks 15/21d (P1870), 13/28b (P1866), 22/5 (P1876)
EnCore has also, subject to necessary DECC approvals, acquired a 50 percent interest in the above mentioned 26th Round Promote licenses under the terms of a pre-existing option agreement between EnCore and Echo Exploration Limited for a nominal sum. Echo Exploration is a 100 percent owned subsidiary of North Sea Energy Inc..
Block 15/21d contains the 15/21-50 Beehive discovery well, drilled by Amerada Hess in 1993 which flowed 5,700 bbls/day of 28 API oil on test.
Alan Booth, Chief Executive of EnCore commented, "We are especially pleased to have reached agreement with the P218 group to progress the further evaluation of the Spaniards/Gamma discovery. Although not without risk, if successfully appraised, Spaniards/Gamma has significant upside potential but also a relatively low commerciality threshold, given both the proximity of the Scott Field and the potential for synergies with the prospective development of the nearby Perth Field. Block 15/21 is a prolific block, containing a number of previously developed fields and having had 56 exploration and appraisal wells drilled in it to date, the last well, 15/21-56, being drilled some 14 years ago. We believe that the time is now right for further evaluation of these undeveloped discoveries."
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