Republic of Yemen
Burren has signed a new production sharing agreement ('PSA') on Block 6, an onshore area of 3,900 sq. km., with the Ministry of Oil and Minerals, taking the role of operator with a 92% working interest. Parliamentary ratification is expected before the end of February.
The Block 6 PSA working interests are:
Burren Energy (Yemen) Limited (Operator) 92% Delta High Advanced Co Ltd 3% Yemen General Corporation for Oil and Gas 5%
Burren will fund, and recover from cost oil, 100% of all costs until payback. In addition Burren has granted to our Yemeni partners a 5% royalty interest in the profit oil, as a result of which Burren's net beneficial interest will be 87%.
Block 6 is located in the prolific Shabwa Basin and lies between the major oil and gas producing areas to the west, previously operated by Hunt, and Block S2 to the east, where OMV has recently received government approval to commence the development of its 170 million barrel oil field in fractured basement reservoirs.
Burren will focus on the basement potential in Block 6 which has not been explored by previous operators. The Company intends to acquire a 3D seismic survey over the most prospective area in 2006 and target the basement structures for drilling in 2007.
Sultanate of Oman
Burren has signed a farm-in agreement with Oman Hunt, a subsidiary of Hunt Oil, on offshore Block 50 to acquire a 40% non-operated interest. The assignment is currently awaiting government approval.
Block 50, which is operated by Oman Hunt and has water depths of up to 100 metres, covers 16,680 sq. km. of the offshore Masirah Basin which demonstrates similarities to the prolific oil and gas basins onshore Oman. Previous drilling in Block 50 demonstrated the presence of an active petroleum system, but poor seismic data quality has prevented the confident definition of drillable structures.
The programme in 2006 is therefore designed to acquire detailed, high quality 2D seismic over potentially large structures in order to prepare for a decision regarding a drilling programme at the end of 2006.
Commenting today, Finian O'Sullivan, Chief Executive of Burren, said
'The additions of these new interests complement our existing portfolio, strengthen our Middle East asset base, and provide the potential for further exploration activity impact and newsflow beyond the extensive programme already planned for 2006.'
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