Bow Valley has been awarded two Traditional Seaward Production Licenses in the 23rd Offshore Oil and Gas Licensing Round. They cover blocks 16/27c and 9/28b, both awarded at 100% working interest.
In addition, Bow Valley has contracted to purchase an operated 70% working interest in block 16/27a North from ConocoPhillips. The transfer of the working interest and operatorship of the block is subject to U.K. Department of Trade and Industry approval.
The 16/27a North block was originally awarded in the 4th Offshore Licensing Round, thirty-four years ago, but has remained one of the few undrilled exploration blocks in the Central North Sea. Bow Valley has mapped several prospects in multiple zones on this block and it is the Company's intention to proceed toward drilling one of these prospects as soon as possible. Blocks 16/27a North and 16/27c are contiguous and within 10 km. of producing fields at Britannia (c. 3 TCF), Alba (c. 500 million bbls) and Andrew (c. 170 million bbls).
On the 16/27c block Bow Valley will immediately proceed to reprocess 150 sq. kms of 3-D seismic and continue with its geological mapping to hopefully bring this block to a drilling stage. The block is also within 10 kms. of the Chestnut field in which Bow Valley has a 15.125% interest and the partnership group are currently pursuing a development plan to bring the Chestnut field on production in 2007.
The exploration block 9/28b is within the South Viking Graben and considered prospective for Brae-type Jurassic structures. Bow Valley will acquire infill 3-D seismic over an identified exploration prospect, and drill an exploration well contingent on the seismic results.
R.G. Moffat, President and CEO of Bow Valley Energy Ltd. stated "The acquisition of these blocks represents a continuation of Bow Valley's full cycle exploration strategy in the North Sea. We want to build a prospect inventory that would support a drilling program of three to five exploration wells per year. This strategy complements the Company's development portfolio, including current plans to develop the Blane, Enoch and Chestnut fields. The first two development projects at Blane and Enoch are scheduled to commence production in the fourth quarter 2006 which should result in significant production growth. The exploration blocks are also particularly significant because they establish Bow Valley as an operator in the U.K. offshore".
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