Canamens Cinches Interest in North Sea's Kraken, Mariner

Nautical Petroleum plc has entered into a farm out agreement with Canamens Energy North Sea Limited whereby Canamens will acquire a 35% interest in the North Sea Block 3/27a.

Under the terms of the agreement, Canamens will fund their ongoing 35% interest of the current well plus a portion of Nautical's costs and a contribution to past costs.

Following the completion of the farmout the participants are:

  • Nautical Petroleum (Operator) 35%
  • Celtic Oil Limited (wholly owned by SK Energy) 30%
  • Canamens 35%

The well is anticipated to spud in October 2008.

Block 3/27a lies immediately to the north of block 9/2b, on which, at the end of 2007, Nautical and its partners drilled the successful appraisal well 9/2b on the Kraken discovery in the Heimdal Sandstone. The integration and interpretation of 1413 km of recently acquired high density 2D seismic with the existing 100 square km of 3D seismic has confirmed two prospective horizons in 3/27a - a pinch out in the Heimdal and a wedge of Jurassic sand.

The prospect, known as Hydra, is planned to be drilled in October of this year. The site survey is currently being acquired. In addition the block also contains the Hydra West prospect which is an analogue of Kraken.

Commenting on the farm out to Canamens, Steve Jenkins, CEO of Nautical, said, "The farm out on block 3/27a is excellent news for Nautical shareholders, and allows us to focus our financial resources on the development of Kraken and Mariner.

"At the same time, Nautical retains a material interest in an exploration prospect that offers good potential for a significant oil discovery at minimal cost, with Nautical's exposure to the well cost expected to be below £1 million.

"In Canamens and Celtic we have strong partners who are committed and aligned across key exploration and development activities."