The Board of Mediterranean Oil & Gas Plc has announced that the Italian Ministry of Natural Resources has determined to award to the Company the Aglavizza production concession and two new large exploration permits (Agnone and S. Buono).
Aglavizza Concession (MOG 100%)
Aglavizza is an onshore production concession which contains the Civita gas field. The Civita 1 well discovered gas bearing tertiary sands at a depth of about 1200 meters with proved and probable reserves over 1 Bcf. The Civita 1 well has been completed and suspended as a producer. MOG purchased the Aglavizza concession application as part of its acquisition of the then named JKX Italia Ltd. The Company anticipates it will be able to profitably develop and operate this field from the Civita 1 well by utilizing existing operational resources without increasing the Company's operating costs.
The Civita gas field is expected to produce approximately14,500 scm/d. (512Mcf /d). Production is expected next year upon finalization of usual environmental assessment approvals. The Company has identified further upside potential in the concession which it will evaluate in due course.
S. Buono and Agnone Permits (MOG 100%)
The Company won the S. Buono and Agnone permits in competition with 3 other E&P companies. S. Buono and Agnone are adjacent exploration permits covering a total area of 1,484 square kilometers in the Molise Region (onshore central Italy). They are located south of the Aglavizza Concession near other gas fields operated by the Company.
The petroleum play in the Permits is a sub-thrust play similar to the Southern Apennines play exemplified by the giant Val D'agri and Tempa Rossa oil fields and the Monte Grosso oil prospect. The Company owns a 22.89% interest in and operates the Serra San Bernardo Permit and the Monte Grosso prospect contained in it. The depth of the target formations are however much shallower, at 2,500 to 3,000 meters, in the Permits than in the Val D'agri area.
The Permits contain an untested oil reservoir which was encountered by the Pescopennataro 1 well drilled by ELF in the 1980s.In accordance with normal practice the concession and the Permit awards are subject to MOG fulfilling standard conditions.
"The Aglavizza Concession represents an attractive opportunity to increase our gas production in the short term. This award creates value for MOG and demonstrates our ability to leverage our existing operational base and expertise in Italy to integrate and add value to acquisitions. The Agnone and S. Buono exploration permits consolidate our portfolio along the Southern Apennines oil play trends in areas where our Company's experience both in exploration and production gives us a distinct advantage," said CEO Sergio Morandi.
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