Nautical Petroleum and SK Corp Ink Farmout Agreement

Nautical Petroleum has concluded comprehensive multi-license farm-out agreements with SK Corporation of South Korea. The agreements cover a selection of North Sea heavy oil prospects in the extensive Nautical portfolio of UKCS license interests.

Under the agreements SK Corp shall carry part of Nautical's exploration expenditures on a 2 for 1 basis for the proposed work program above. The wells are to be drilled between 2007-08 as part of Nautical's commitment to its licensing terms with the Department of Trade and Industry.

The multi-block agreements between Nautical and SK Corp. require both companies to fund and participate in active exploration and appraisal which will extend the overall work program and is aimed at accelerating the production phase. The multi-block scope will also benefit both parties by spreading risk. The agreements are contingent on certain formal consents and approvals being confirmed by the DTI and the Government of the Republic of Korea, all of which are expected to be finalized within 3 months.

The farm out invitation process followed comprehensive technical preparation by Nautical and was conducted over the past two months. The program has seen more than 10 companies assess the potential of the Nautical's assets on offer. Interested parties reflect the full range of industry participants - from specialized independent to major exploration and production companies. For Nautical, this represents independent confirmation of growing industry interest in heavy oil opportunity, effectively endorsing the business focus and strategy of the company.

Commenting on the farm out process, Steve Jenkins Chief Executive of Nautical said:
"We welcome the SK Corporation and its participation in developing new production from the UKCS. Our agreement with SK Corp. illustrates the continuing interest in the North Sea, which extends from the super majors to medium sized independent oil companies. Our strategy of thorough technical preparation has provided a sound basis for their evaluation of the opportunities in our asset base. The prospectivity of our licenses has been clearly underpinned by this interest.

This transaction supports an acceleration and expansion of our immediate work program. Our focus in the coming two years shifts to the development and management of an extensive drilling program across our asset portfolio. A key objective is to achieve first oil within our planned timetable of late 2007 or first quarter 2008."

The farm out agreements extend across four blocks as detailed below:

License     SK Corp. farm-in equity    Nautical equity interest   Work Program
            interest %                 ongoing %

9/2b        30%                        45%                        3D seismic and 2
3/27a       30%                        45%                        3D seismic and 1
9/11c       40%                        60%                        1 well
8/25a       40%                        60%                        1 well

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager, Oil and Gas
Expertise: Petroleum Engineering|Project Management
Location: West Chicago, IL
Business Development Manager
Expertise: Business Development|Construction Manager
Location: Portland, OR
Business Development Manager
Expertise: Business Development|Construction Manager
Location: Denver, CO
search for more jobs

Brent Crude Oil : $51.46/BBL 0.61%
Light Crude Oil : $50.52/BBL 0.64%
Natural Gas : $2.83/MMBtu 5.35%
Updated in last 24 hours