Maersk Oil Takes Stake in Ithaca's Greater Stella Area
Maersk Oil has notified Ithaca on February 12 that it exercises its option to farm in to the High Pressure/High Temperature ("HP/HT") play in both the Company's blocks 29/4b and 29/5e, which lie in the Greater Stella Area ("GSA"). This transaction offers the potential to drill two deep exploration wells (one on each block) in which Ithaca shall be carried for all costs up to the end of the first well on each block.
The Farmout Agreement ("FOA") that is to be finalized for both blocks shall be subject to normal due diligence and approvals. The FOA will be executed within 60 days from date of notification of the option being exercised. The outline terms of the FOA are agreed as follows:
- Maersk Oil shall be granted a 95% equity interest in the deep horizons below the Base Chalk horizon in each of the exploration blocks drilled. In return and subject to drilling, Ithaca shall be carried for 100% of all costs in respect of its 5% residual interest up to the end of the first well drilled on each block to explore the HP/HT play in each of the blocks 29/4b and 29/5e (at Maersk Oil's option).
- The Farmout transaction strictly applies to the deep section, below the Base Chalk horizon. Ithaca retains 100% equity interest in the shallow section, above the Base Chalk horizon in blocks 29/4b and 29/5e.
Maersk Oil, as operator, has previous experience in HP/HT drilling in this area of the Central North Sea. This Farmout transaction will enable Maersk Oil to fully employ its HP/HT technical capability in blocks 29/4b and 29/5e.
Ithaca will continue to be responsible for the obligations of the license, which includes the obtaining and reprocessing of 3D seismic data, up to the point of Maersk Oil committing to drilling and earning an interest in either block.
Nick Muir, Chief Exploration Officer, said, "I am delighted with this opportunity for Ithaca to work alongside Maersk Oil to unlock the HP/HT potential in this area. We believe that Maersk Oil's extensive knowledge and technical expertise in exploration of the HP/HT play will enable Ithaca to further consolidate its position in the GSA."
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