Oil and gas explorer and producer Fastnet has acquired further exploration acreage in north-eastern Morocco.
Executing a $300,000 option agreement, AIM-quoted Fastnet has secured farm-in rights on eight exploration blocks covering an area of 14,548 square kilometres in the Atlas mountains' Tendrara basin.
Fastnet will gain 50% rights from local operator Oil and Gas Investments Funds (OGIF), with state oil firm ONHYM taking a 25% gross carry, as with all licences.
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With its subsidiary Pathfinder Hydrocarbon Ventures acting as technical operator, Fastnet will need to fund the entire drilling costs of an appraisal or pre-development well on or before February 28th 2014 in order to complete its side of the deal.
The eight blocks have been independently assessed as having an important potential of gas and sit within a proven hydrocarbon system where existing gas discoveries have been made.
Fastnet's Managing Director Paul Griffiths said the company had already sourced a drilling rig for the well.
Once the well has been completed and equity interests in the licence have been transferred Pathfinder will provide OGIF with a $2.75mm irrevocable bank guarantee that will cover a potential withdrawal by Pathfinder.
This will be returned to Pathfinder by OGIF upon completion of a further work programme where Pathfinder is due to pay drilling costs for two further appraisal wells by April 1st 2015 and April 1st 2018.
"The Tendrara Licence offers our shareholders an exciting early drilling opportunity to appraise an existing gas discovery," Griffiths said.
"A successful drilling result at Tendrara could be the catalyst to move towards an Outline Development Plan and rapid monetisation of the original gas discovery.
"In this respect OGIF is a particularly valued partner as we share a common vision of being a joint venture partnership with ONHYM capable of making a material impact on the Moroccan gas market and assisting the drive for gas-fired power generation."
Shares in Fastnet were up 1% to 24p at 13:00 on Wednesday.
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