Under the agreement, the Joint Venture will also be restructured with RAB, FIC and Global forming a new company, Falkland Oil and Gas Limited (FOGL).
FOGL will own 77.5% of the licenses with the remaining 22.5% to be held by Hardman.
Global Petroleum previously had a 50% interest and was Operator of the seven (7) offshore petroleum licenses held in the old Joint Venture.
Under the restructure, Global will retain a 25.7% stake in FOGL.
The Board of FOGL will comprise representatives of RAB, FIC and Global and the initial Chairman will be Dr John Armstrong, Executive Chairman of Global Petroleum.
Initially FOGL will be funded by its shareholders as to US$3.8 million (US$2.2 million from RAB, US$1.1 million from FIC and US$0.5 million from Global), from which FOGL will contribute its share of the FOGL-Hardman Joint Venture requirements in regard to the management, planning, acquisition, processing and interpretation of the new Falklands seismic survey.
The FOGL-Hardman Joint Venture has appointed Dampier Oil Limited, a wholly-owned subsidiary of Global Petroleum, to operate the project during the seismic period.
The FOGL-Hardman Joint Venture plans a 3,500km survey in the last quarter of 2004 but this may be expanded subject to tenders received and whether a non-exclusive arrangement can be agreed with the seismic contractor.
Mapping in 2003 of 4,340 kilometers of purchased seismic data has identified a number of leads in water depths of 400-1,850 meters. The leads are capable of containing 200 million to 2.5 billion barrels of oil, if oil is present in these areas.
The FOGL-Hardman Joint Venture's licenses are located to the south and east of the Falkland Islands.
No wells have been drilled in these areas. However, two wells in the adjacent Malvinas Basin to the west have flowed 3,000 bopd (Calamar No. 1) and 20 MMcfpd (Salmon No. 2) from the Cretaceous Springhill Formation whose equivalents are expected to occur in the new Joint Venture's licenses.
These oil and gas flows offer support to the view that the Joint Venture's licenses contain an active petroleum system within the 8,000 meters of Late Jurassic to Tertiary sedimentary section. The south and east Falkland areas are geologically distinct from the North Falkland Basin which was the focus for oil exploration activity during 1996-98.
FOGL plans to seek an eventual listing on the UK Alternative Investment Market (AIM).
Most Popular Articles