Pegasus are specialist subsea engineering consultants, with offices in the UK and the USA, who support operators in the definition of field development options and the associated detailed design works. The Phase 1 works for the front-end engineering studies will establish a technical definition for the subsea tie back options and the operational and functional requirements for the subsea facilities. They will also generate production profiles and gas composition and condensate recovery volumes.
This work, in conjunction with other studies that are currently being undertaken, will provide a basis for the updating of field development cost estimates and schedules. It is anticipated that the subsequent planned Phase 2 works, in the end of the 4th Qtr 2007, will enable an active dialogue with suppliers and offshore service contractors in order to establish field development plans. These plans will form the basis for a Declaration of Commerciality. Following this an application for a Petroleum Lease covering the two gas fields, together with a Plan of Development, will then be submitted to the Minister for Communications, Energy and Natural Resources for approval.
Following technical evaluation of the drilling results from the recent Old Head of Kinsale and Schull pre-development wells this summer, Island believes the two fields potentially contain in the range of 80 to 120 bcf of recoverable gas, subject to confirmation and verification as part of an updated reserves report that is currently underway. Preliminary discussions with Parties that could potentially market any future gas produced from Old Head and Schull have been initiated.
In addition to plans for the joint development of the two fields, Island continues to investigate gas storage opportunities and the potential partnership advantages to Island, its co-venturers and the Irish government in offering a possible strategic gas reserve for the country.
Commenting on the award of the contract, Paul Griffiths, Chief Executive of Island, said:
"Our pre-development drilling results this year has exceeded the pre-drill expectations, as a consequence of which we can now consider the joint development of the gas fields. This could result in a significant cost saving and a greater flexibility to market the gas in a way that exploits the potential uplift in Winter gas prices. Island has initiated the process of confirming the commercial potential of the Old Head and Schull gas fields prior to a Declaration of Commerciality"
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