Pan Andean and Hunt Oil have agreed that oil and gas production from the new discovery will be tied into the Pan Andean platform. It has also been agreed that Hunt Oil will takeover operatorship of the Pan Andean platform on High Island 30.
This agreement will improve the cash flow from the block through a monthly production handling fee of $40k and lower expected operating costs; it also extends the life of the platform by an expected 7 years. Most importantly it improves prospectivity of the High Island 30 Block where little prospecting has been done in the past three decades, opening a new exploration option for Pan Andean.
The long delay in bringing our platform back into operation is almost over. Tying in the new discoveries and refitting the platform will take upwards of six weeks. In addition, ownership changes at High Island 24 have delayed refurbishment of the High Island 24 platform, which will pump the oil from High Island 30 and High Island 31 to shore. It is now anticipated that all facilities will be on stream during Q2 2007. Oil production from High Island 30 is expected to commence at over 300 barrels of oil per day.
John Teeling, Chairman, commented:
"This is an excellent deal for Pan Andean. The seven-year life of the project will provide positive cash flow and defer any potential abandonment liability.
More importantly, this discovery is very close to our block. We are therefore reassessing High Island 30's exploration potential as little prospecting has been done in the past three decades."
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