13th Apr 2015 07:51
LONDON (Alliance News) - Falkland Oil and Gas Ltd Monday said it has agreed with its joint venture partners to revise the drilling programme on the the South and East Falkland basin in order to fulfil its drilling obligations in the best way possible.
The company said it had agreed with joint venture partners Noble Energy and Edison International to defer the second well on the basin in order to drill a well in the North Falklands basin.
"The joint venture partners have concluded; having taken into account a number of factors, that the optimum course of action is to defer the drilling of a second well in the southern basin. In these circumstances Falkland Oil was amenable to a proposal from Noble, that in order to fulfil the drilling commitment, they should utilise the contracted drilling slot to drill a well in the North Falklands basin," said Falkland Oil.
Falkland Oil said by revising the drilling programme it will give it more time to analyse results and to plan further exploration and appraisal wells in the area and could potentially benefit from lower drilling costs in the future dependent on the movement in oil prices and drilling activity.
Falkland Oil said it will also leave the company in a "stronger financial position" at the end of the current drilling programme.
The company's drilling programme began in early 2015, with the highly prospective Zebedee well already drilled at the beginning of April. Falkland is now currently drilling the Isobel deep water well. Falkland Oil holds a 40% interest in both these wells.
On April 2, the company said the Zebedee well had been drilled. Its partners on the well are FTSE-250 Premier Oil PLC and Rockhopper Exploration PLC. The results showed a total of 18.5 metres of net gas pay, and 27.9 metres of net oil pay in the well. The Isobel well is also in partnership with Premier and Rockhopper and drilling began on April 9.
Following those wells, the Humpback well will be drilled in May in partnership with Noble and Edison. The Humpback prospect is thought to have between 250 million and 650 million barrels of oil and Falkland Oil holds a 52.5% stake in the prospect.
The last three wells will consist of Jayne East, Chatham and Rhea. Falkland Oil only has an interest in the Jayne East well of 40% as it is only currently fully funded for the first firm four wells. All three of these wells are in partnership with Noble and Edison.
The company said the revised programme does not affect or change any agreements in place with its joint venture partners.
"We are very satisfied with this alternative plan for the exploration of the South and East Falklands basins which provides more time to fully utilise the extensive 3D seismic dataset, assimilate the results of the Humpback well and take advantage of the lower rig and services costs that may prevail," said Chief Executive Tim Bushell.
Last Thursday, on the same day the Isobel deep water well was drilled, Sky News reported that Argentinian President Cristina Fernandez threatened to take action against UK oil companies if they start drilling in the Falkland Islands on the grounds that they are "illegally" operating in Argentine waters.
Falkland Oil shares rose by 0.7% to 29.21 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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