Nautical Petroleum plc announced that it has entered into a farm-in agreement to acquire up to a 65% interest in the Standard Exploration Licence 2/07 containing the Nemo heavy oil discovery.
Nemo is situated approximately 60 kilometres offshore Ireland in the North Celtic Sea Basin in c. 90 metre water depth. Discovered in 1974, this c.16o API heavy oil accumulation is estimated to have an in place resource potential of up to 230mmbo.
Providence Resources plc (Providence), and their partners have agreed to farm-out up to a 65% equity interest in two stages in Nemo to Nautical. In return for an initial 25% stake, Nautical will fund and carry out a work programme on the development feasibility of the Nemo discovery. Nautical have a further option to increase their stake to 65% and assume operatorship should we elect to drill an appraisal well by the end of 2011. Nautical will fund 100% of the cost of the well.
Providence, the operator, currently holds a 72.5% interest in Standard Exploration Licence 2/07, Atlantic Petroleum holds 18.3% and Sosina Exploration holds 9.2%. The farm-in transaction is subject to the approval of the Irish government.
Steve Jenkins, Nautical’s Chief Executive Officer, commented:
“We continue to build a material portfolio in Ireland in an area which demonstrates considerable exploration and appraisal potential. With Nemo we have an opportunity to use our expertise in heavy oil to potentially exploit the resource upside of this discovery”
Source: NauticalPetroleum,September 28, 2010,