Sun Resources Says Malta Seismic Work Delayed
Sun Resources reports that at the end of June 2005, the Malta Joint Venture had signed a Participation Agreement with Anadarko, which provided for Anadarko to earn an interest in the Malta Project by funding agreed activities on two contiguous permit areas (ESA Area 4, Block 3 and ESA Area 5) totaling 14,800 square kilometers on the Pelagian Platform in southern Maltese waters abutting Tunisia and Libya. These activities were further infill 2D seismic on ESA Area 5 leading to Anadarko at its option to enter into a Production Sharing Contract with Sun Resources, Pancontinental and the Government of Malta to drill up to two wells on either or both the very large Chianti and Limoncello Prospects. These prospects, delineated in 2004 by Sun Resources and Pancontinental in ESA Area 5, have large speculative reserve potential, ranging from a mean 455 million barrels recoverable oil potential (Chianti) to a mean 968 million barrels recoverable oil potential (Limoncello). The potential estimates are based on current seismic mapping and using representative reservoir parameters from neighboring commercial field analogues in Libyan and Tunisian waters. Anadarko, under the Agreement, has options to earn a 65% interest in the Production Sharing Contract on completion of one well, and to increase its interest to 75% by again drilling a further well at no cost to Sun Resources and Pancontinental.
At the end of June 2005 Anadarko was tendering for a seismic vessel for the 2-D infill seismic program in ESA Area 5 that was expected to take four weeks. However, following a meeting in Malta in July with the government and subsequent correspondence over the last 1-2 months, the new joint venture, at the Maltese Government's request, has suspended the seismic survey for 6 months to assist the government in facilitating the resolution of the border issues it has with both Tunisia and Libya. These border issues affect the western and southern boundaries of ESA Area 5. The 2004 seismic survey was conducted within undisputed Maltese waters away from these unresolved border areas. It was this seismic survey that revealed a number of significant world class prospects and leads in undisputed Maltese waters which motivated Anadarko to conclude a Participation (Farmin) Agreement with Sun Resources and Pancontinental in June 2005.
While the request of the Maltese Government will delay the seismic, the new joint venture is pleased that the border issues are being addressed. Resolution of the boundary issues has the potential to open up additional areas for exploration within the current permits that the original Sun Resources – Pancontinental joint venture previously chose not to enter. The border negotiations do not impact on the mapped main prospects and leads. It is expected that the delay will now see the seismic program deferred until early 2006 until after the northern hemisphere winter which is a period not conducive for seismic operations. In all probability the program will be run in conjunction with other 2D seismic planned on acreage acquired by Anadarko in its own right in neighboring Tunisian waters.
Current equities in the Malta Joint venture are Sun Resources NL 20% (reducing to 7% after one well) and Pancontinental Oil & Gas NL 80% (reducing to 28% after one well)
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