Gippsland Offshore reported its third quarter operations. Highlights include:
Kenya PSC negotiations finalized
Gippsland Offshore, operator of the L-6 joint venture won approval from the Ministry of Energy in Kenya for the next phase of the PSC committing to 2 wells in four years. The amended terms of the PSC incorporating gas development terms and other changes has been agreed and the L-6 JV is planning for the next phase of exploration.
To date, 7 prospects have been mapped in the L-6 block. These prospects have the potential after early risking to house approximately 3TCF of gas and Gippsland Offshore is planning to acquire additional onshore seismic data to better define the closure on the onshore Kudu prospect prior to drilling.
There are good indications of hydrocarbons in the permit with 2 wells having flowed gas and a number of wells with gas shows (and offshore slick mapping shows the presence of natural oil seeps). The prospects in the north are primarily gas and presence of oil is more likely in the southern prospects.
Progress of other projects
The current global economic crisis and slump of the oil price has further delayed the farming out of the Jamaica project. Gippsland Offshore remains confident in finding a partner for this project, however, until there is confidence in the industry of a stable oil price, the likelihood of concluding a deal is limited in the shorter term. On the positive side, there is no required expenditure for this project other than permit retention costs and no commitment to drilling due until 2010 so the JV has decided to recommence the farm-out process in the new year when market sentiment is more positive.
Data compilation and planning for the FALCON® survey over the St Griede project in France will be commencing this next quarter. The FALCON® survey is scheduled to be acquired once all regulatory approvals have been secured.
The Cap D'Ambre project offshore Madagascar is still awaiting Government signature and we are hoping for a year end sign off and award.
Gippsland Offshore is pleased to report that no large exploration costs are due to be incurred in the next period.
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