Processing of the seismic data will take place at Fugro's seismic processing facility in Perth, Western Australia and will commence upon receipt of the seismic data later this week.
Fugro anticipates that the processing of the seismic data should be complete within eight weeks of commencing the processing.
Following the completion of processing, quality control and prospect mapping incorporating both the existing and newly-acquired seismic data, Grove intends to initiate negotiations for a partial farm-out of the Pantelleria Exploration Permits.
Grove holds 100% of the exploration rights to two large concessions in the Sicily Channel that lie on the Italian side of the Italy-Tunisia median line and cover a total area of approximately 132,250 hectares: the Pantelleria West Exploration Permit and the Pantelleria South Exploration Permit. Grove acquired the Pantelleria Exploration Permits in April 2002 and they are in their initial six year term. The Corporation has the right to apply for an additional three year term, subject to meeting its work commitment obligations for each of the Pantelleria Exploration Permits under Italian law.
Geologically, the two Pantelleria blocks lie within the Hammamet Basin. The Hammamet Basin is of Tertiary Age and extends onshore into western Sicily, as far as the coast of northern Tunisia and into the Gulf of Hammamet. The western Sicily portion of the Basin is separated from the Tunisian Basin by the Pantelleria graben. The Miocene sands and carbonates are the main objectives of Grove in this region. The deeper chalky limestone Aboid Formation has produced both oil and gas, notably in the Dougga-1 discovery 25km south-east of the Pantelleria Exploration Permits but this horizon, because of a lack of infrastructure, has not yet been commercially exploited in this part of the Basin. The Miocene reservoirs in the Nilde and Birsa Formations generally have high quality shaly seals and most of them are oil or gas bearing in the surrounding areas. These formations are shallow and have good to excellent reservoir properties with permeability typically in excess of a Darcy. Sandstone of the Miocene Birsa Formation hold the majority of the hydrocarbon reserves found in the Hammamet Basin and are the main petroleum targets in offshore Tunisia. Traps are usually associated with three-way-dip-closure anticlines compartmentalized by sealing normal faults. Vertical sealing is stratigraphic since all main reservoir intervals are overlain by shaly intervals.
An AGIP oil discovery, the Zibibbo-1 Well, is located between the Pantelleria Exploration Permits. Drilled in 1988 in water depths of 102m, the Zibibbo-1 Well found oil in the Tertiary formations and tested oil at a rate of 550 bop/d. The discovery well remains suspended. Nearby on the Tunisian side of the border, the 22 MMbbls Tazerka Oil Field was produced to abandonment by a major oil and gas corporation using a floating production facility and sub-sea wells.
The fiscal terms are attractive with a Government royalty of 4% on liquid hydrocarbons produced from the Pantelleria Exploration Permits, and the first 50,000 tons on an annual basis are exempt from the royalty. Taxes applicable to Grove for operations in Italy in the form of corporation and local taxes average at approximately 33%.
Grove Energy is engaged in the exploration, acquisition and development of natural gas and oil in South East Europe and the Mediterranean margin. Grove's principal exploration and appraisal properties are located onshore Slovenia, Italy and Romania, and offshore in the area surrounding Pantelleria Island in the Sicily Channel.
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