Fastnet Oil and Gas, the energy firm focused on near term exploration acreage in the Celtic Sea and Africa, is to take up its option to buy a half-share in a proposed Merada licence application, onshore Morocco.
The Merada Licence Application is subject to approval and execution by the Office National des Hydrocarbures et des Mines (ONHYM).
Fastnet will pay half of all exploration costs, including a pro-rata share of a $1.5m guarantee required by the Moroccan government.
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The area within the Merada licence application represents an opportunity to target a Tertiary turbidite (rock deposited by a swiftly moving bottom-flowing current) fan system which the board believes is substantially larger than hydrocarbon traps in neighbouring licence areas.
"With Merada in place, we have potential exposure to some high impact, near term and relatively low risk exploration wells which should allow us to give our shareholders material upside potential contained within the licence area," claimed Cathal Friel, Chairman of Fastnet.
Fastnet will be the operator of the licence, and its interest will be 37.5% net, exclusive of ONHYM's 12.5% carry interest; the owner of a carried working interest is not required to pay for any drilling and completion costs, but will usually pay for a share (based upon working interest ownership) of the administrative and operating costs run up once the wells start producing.
Drillbit Exploration is the other partner in the licence and it too has a 37.5% net stake, exclusive of the 12.5% ONHYM carry.
Fastnet has provisionally agreed with ONHYM that there will be an initial three-year exploration period during which Fastnet must perform a minimum amount of exploration, which will include reprocessing and interpretation of 1,000 kilometres (km) of existing two-dimensional (2D) seismic data plus a number of desktop studies. Dependent on the outcome of this work, Fastnet and Drillbit Exploration must also either acquire, process and interpret a minimum of 250 km of new 2D seismic data or drill one well to a minimum depth of 2,000 metres or to the top of the Jurassic section, whichever is shallower.
The minimum exploration commitment is expected to be $3.65m for the initial exploration period of which Fastnet's share would be 50%.
"Following further evaluation of the seismic data and a site visit to look at the reservoir, our management team is confident that a much larger basin centre Tortonian fan play is present in the block than previously anticipated," Friel said.
