Beach Petroleum has farmed in to an offshore oil and gas play in the Adriatic Sea, its second foray in as many months into Europe's energy markets.The first exploration well in the permit, in the Adriatic Sea, between Italy's coastline and Albania to the east, could be drilled as early as 2009.
Beach will acquire an initial 25% interest in the project with an option to move to 45%.
"Our initial exploration intention is for relatively low risk/reward targets in shallow water and close to shore," Beach Petroleum's managing director, Reg Nelson said.
"However, subsequent exploration, which will target deeper water prospects in the Adriatic, will have the potential to yield reserves in excess of 100 million barrels of oil equivalent net to Beach.
"The move is consistent with Beach Petroleumís strategy of increasing the company's exposure to more international exploration projects which have the potential to make material additions to Beach's reserve base, while maximising our Australian production and exploration opportunities."
Beach Petroleum last month announced its first entry into Europeís energy markets - a $3 million commitment on a seismic survey to earn a quarter share interest in four highly prospective gas bearing tenements between the Spanish cities of Barcelona and Madrid. The remaining 75% interest in the Spanish project is held by international oil and gas exploration and production company, Serica Energy plc, which has operations in the United Kingdom, the North Sea, Norway, Ireland, Spain, Indonesia and Vietnam.
Under the Adriatic Sea farm-in initiative, Beach is acquiring a 25% interest in the Durresi Block in offshore Albania under an agreement with Island International Exploration BV (IIEBV).
IIEBV is a wholly-owned subsidiary of Island Oil and Gas Plc, founded in 2003. Island Oil & Gas plc (LSE:IOG) is an independent exploration and production company with interests in eleven Irish offshore licences, including a producing gas field. Island has also secured projects offshore from the Netherlands and onshore Morocco.
The Durresi Block covers an area of 4,200 square kilometres along the Adriatic coast of Albania.
It contains an unappraised gas/condensate discovery and several undrilled oil and gas prospects and leads.
Mr Nelson said the planned exploration program for 2008 is expected to consist of seismic acquisition, followed by the drilling of one well in 2009.
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