After ELSA 1 was drilled Enterprise Oil plc, one of the partners in the consortium, estimated proven and probable reserves ("P2") in the ELSA 1 structure to be 108 million barrels. In addition, a recent published independent expert's report from Petrel Robertson commissioned by Vega Oil S.r.l. (our partners in the block) concluded that the P2 reserves are 182 million barrels. Given:
The Company believes the value of proven and probable oil reserves in the license area to be commercially very attractive.
The Company has certain pre-emption rights over any sale of its Italian's partner's 60% interest in the License.
The Company has been informed that there will be drilling in 2006 on an adjacent block to the east on a prospect similar to Elsa. There are also a number of suitable rigs currently operating in this region of the Mediterranean and Petroceltic with its partner is planning to drill an appraisal well to the Elsa 1 discovery in 2006. Under the terms of the option, Petroceltic will pay 60% of the cost of this first well and thereafter its 40% share.
John Craven, CEO of Petroceltic said:
"This License is now becoming a very substantial asset of the Company and there is, I believe very significant value in the ELSA 1 discovery."
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