Nautical Petroleum plc, the developer of heavy oil interests on the UKCS and mainland Europe, announced that it has entered into a farm out agreement with Canamens Energy North Sea Limited whereby Canamens will acquire a 30% interest in the North Sea Block 8/25a.
Under the terms of the agreement, Canamens will fund their ongoing 30% interest of the current well plus a portion of Nautical's costs.
The farm out terms provide for a $20 million cap on the Selkie well expenses against a current estimate of $16 million.
Following the completion of the farm out Nautical will retain a 30% interest and Celtic Oil Limited (wholly owned by SK Energy) will retain a 40% interest. On completion of the well, and subject to partner and BERR approval, Canamens will take on operator responsibility for Block 8/25a.
As announced on the 12 May 2008, Nautical commenced its first exploration well on block 8/25a, which will assess the Selkie prospect.
Following this and previous transactions, Nautical now has an effective 100% financial carry on the current exploration program on Block 8/25a.
Nautical is also in advanced discussions with Canamens regarding further farm-out agreements on Blocks 9/2b and 3/27a, and related announcements will be made in due course when appropriate.
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