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Thursday, May 30, 2013
Fastnet Oil & Gas’ wholly owned subsidiary, Pathfinder Hydrocarbon Ventures, has entered into an exclusive option agreement with Oil and Gas Investments Funds (OGIF) to farm-in to eight exploration blocks comprising the Tendrara Lakbir Petroleum Agreement onshore Morocco.
The Tendrara Lakbir License covers an area of 14,548 sq km, over the majority of the Tendrara Basin. Five wells drilled within the license area have encountered gas-bearing Triassic sands of the Tagi Formation. The Tagi is the host reservoir for Morocco’s producing Meskala gas field, along strike to the west in the Essaouira Basin. All these gas discoveries have been charged from the prolific Silurian source rocks that are an integral part of the proven Palaeozoic-Early Mesozoic petroleum systems covering large parts of Libya, Algeria, and Morocco.
The key terms of the option agreement with OGIF include an entrance fee payable to OGIF of $300,000. Pathfinder will pay 100% of the cost to drill, test and complete an appraisal/pre-development well on the TE-5 Structure (which is where the last well was drilled in the license area). The well is to be drilled on or before the end of February 2014. Pathfinder will act as technical operator for the drilling of the well. Pathfinder is also required to put together an Outline Plan of Development for the TE-5 gas discovery.
Upon the successful completion of the well and the closing of the transfer of equity interest in the Tendrara License, Pathfinder shall provide OGIF with a $2.75 million irrevocable bank guarantee, in the event Pathfinder withdraws from the Tendrara License, or which shall be returned to Pathfinder by OGIF upon completion of a further work program whereby Pathfinder shall pay the costs of drilling two additional appraisal/pre-development wells by April 1, 2015 and April 1, 2018.
The gross ONHYM carry on all Moroccan exploration license is 25%.
If the drilling results are positive, there are opportunities either to export through the Maghreb gas pipeline; to supply power indirectly through the Ain Beni Mathar Power Plant; or directly through on-site power generation. OGIF is a local exploration company which has already done a lot of work and is a valuable partner to develop the area.
Paul Griffiths, Managing Director of Fastnet said: “Subject to fulfilling our drilling commitment and regulatory approvals, we will be increasing our acreage position in Morocco. The Tendrara License offers our shareholders an exciting early drilling opportunity to appraise an existing gas discovery. Fastnet has sourced a rig for the upcoming Tendrara drilling operations. A successful drilling result at Tendrara could be the catalyst to move towards an Outline Development Plan and rapid monetization 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. It’s a further example of Fastnet’s management team’s activity driven ethos which we believe creates greater potential to generate near-term shareholder value.”
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