Fastnet Oil farms in to MD's pet project

Fastnet Oil & Gas, the exploration & production company, has bought a majority stake in the Shanagarry licensing option in the North Celtic Sea.

Fastnet will become the operator of the field after acquiring an 82.35% interest from a joint venture group comprising Adriatic Oil, Carob (who are consultants to Fastnet) and Petro-Celtex Consultancy, a company established by Paul Griffiths, now Managing Director of Fastnet.

Adriatic has agreed with Fastnet to farm-out 64.5% of its 80% interest in Shanagarry, leaving Adriatic with 15.5% of the licence. Under the terms of the agreement, Fastnet must finance the acquisition and processing of 200 square kilometres of new three dimensional (3D) seismic data over the area before December 31st 2014.

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Petro-Celtex is selling most of its interest in Shanagarry to Fastnet, as is Carob, leaving them each with a 1.075% interest in the licence. As recompense for the transfer of interests, Fastnet has agreed to pay all costs and charges relating to both companies' remaining shares in Shanagarry, up to the initial production of hydrocarbons from the asset, and possibly beyond that.

Specifically, Petro-Celtex and Carob will get a free ride until the first, and if appropriate the second, petroleum accumulation within Shanagarry that is developed and produced as a consequence of the submission of a separate detailed plan of development.

The licensing option commences on December 1st 2012 and runs until May 31st 2014 and includes part-blocks 49/18, 49/19, 49/20, 49/23, 49/24 and 49/25 in the North Celtic Sea.

"We are delighted to have concluded this significant transaction for a low entry cost on behalf of Fastnet's shareholders. The 49/19-1 structure has significant areal extent even by industry standards. The offshore Atlantic Margin and has been proven already by well logs from 1984 to be hydrocarbon-bearing," said Fastnet's Chairman, Cathal Friel.

"This licence application was originally conceived and developed by Paul Griffiths prior to him joining Fastnet. Now that he is has been appointed Managing Director of Fastnet, he will continue to focus on delivering value for our shareholders through de-risking the prospect. This transaction is wholly consistent with our stated strategy of targeting prospects of sufficient materiality to attract potential oil majors," Friel said.

JH