LGO Stands to Gain from Award of 6 New GOM Leases
Leni Gas & Oil plc (LGO) has noted the announcement from Leed Petroleum ("LDP"), confirming the award of the Eugene Island 133 and Ship Shoal 197 leases in the Gulf of Mexico under the Minerals Management Services ("MMS") Lease Sale 208.
The Eugene Island block is located approximately 110 miles southwest of New Orleans, Louisiana in 60 feet of water and the Ship Shoal block is located approximately 125 miles southwest of New Orleans, Louisiana in 102 feet of water. The leases will each be held for an initial five year "primary" term during which LDP will have the right to explore and produce hydrocarbons. Once production is established, normal lease terms will then apply.
LDP have also announced that the leases covering Ship Shoal block 205 and South Marsh Island blocks 5 and 6 will all expire by July 30, 2009. LDP said they have no plans to undertake any operations to hold the Ship Shoal 205 and the South Marsh Island 5 blocks for which LDP has no attributable reserves. LDP is investigating drilling options that would hold the South Marsh Island 6 lease, which has 674 MBOE of net probable reserves attributable to it and will make a further announcement if drilling is commenced.
In accordance with an area of mutual interest agreement arising under LDP's pre-existing scouting agreement with Byron Energy Pty. Ltd. ("Byron"), Byron will have the right to acquire up to 25% of LDP's working interest in the awarded leases.
LGO retains a 28.94% shareholding in Byron and announced on April 8, 2008 the completion of a Heads of Agreement with Byron to transfer the shareholding from an indirect to a direct ownership of its GoM oil and gas assets. This transfer is subject to Byron Energy shareholder approval; LGO qualifying under Mineral Management Service requirements to acquire the working interests in the Eugene Island assets and compliance to AIM rules.
Byron has also been advised by the Minerals Management Service ('MMS") that it will be awarded four leases in the MMS Central Gulf of Mexico Lease Sale 208 later this month. These leases include West Cameron Area, South Addition blocks 489, 490, 491 and West Delta Area block 49. Byron shall retain a 100% working interest and a 79.25% net revenue interest in these blocks.
Upon completion of the proposed indirect to direct conversion transaction with Byron, LGO will have the right to acquire up to 20% of Byron's interest in each of these leases.
David Lenigas, Executive Chairman, commented, "Following our recent announcement of our intention to convert our Byron shareholding into a direct working interest in the Gulf of Mexico portfolio, the announcement of the award of the Eugene Island 133 and Ship Shoal 197 leases to LDP and the imminent award of four leases to Byron is excellent news. These leases have tremendous potential for significant increases to production and are another step towards substantially increasing the value of our Gulf of Mexico acreage."
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Company: Leed Petroleum more info
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