Junior explorer Faroe Petroleum reported Monday that it has been awarded three new licensing options covering the Celtic Sea, offshore southern Ireland, by the country's Ministry for Communications, Energy and Natural Resources.
The Celtic Sea is home to Providence Resources' Barryroe oil discovery, which contains an estimated 311 million barrels of recoverable oil.
The deal involves Faroe conducting a low cost work program that will see the reprocessing and interpretation of 2D seismic data for each license and the preparation of supporting geological studies.
The licensing options – LO 14/1, LO 14/2 and LO 14.3 – are located in the southern margin of the North Celtic Sea basin in shallow water depths of up to 360 feet and covering an area of 1285 square miles. They contain a largely unexplored Triassic play, similar to that of the Wytch Farm oilfield that is located onshore UK.
Faroe said that an initial interpretation of existing 2D seismic data has revealed the presence of a number of large structural traps within the licensing option areas. The firm said it will deploy recent advances in modern seismic reprocessing techniques to substantially improve seismic imaging, which it has already had success with in Norway and the UK.
Faroe Chief Executive Graham Stewart commented in a company statement:
"We are pleased to have won these licensing options offshore Ireland, where we see attractive optionality. We now have the opportunity at low cost to screen potentially significant exploration targets using our knowledge and experience in seismic reprocessing and interpretation. This Triassic play differs from the traditional targets in the Celtic Sea and offers significant upside potential.
Oil sector analysts at Westhouse Securities commented that Faroe is diversifying its portfolio not too far from its core operations in the UK and Norwegian continental shelves. "These Licencing Options give the company optionality and may evolve into interesting drilling targets in the future," the bank said.
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