Mediterranean Oil & Gas Plc has announced that the Maltese Minister for Resources and Rural Affairs has approved the transfer of the 10% interest Leni Gas and Oil Investments Limited (“LGOI”) held in the Malta Offshore Area 4 PSC to Phoenicia Energy Company Limited (“PECL”), a 100% owned subsidiary of Mediterranean Oil & Gas Plc.
Area 4 comprises four contiguous licence blocks in the southern part of the Maltese offshore adjacent to prospective acreage in Libya. MOG is the operator of Area 4 and now holds 100% of the equity.
The Company has recently completed key de-risking studies, including interpretation of the extensive long-offset 3D seismic survey over Area 4 acquired in late 2011. The acreage contains a number of mature prospects that are analogous to proven plays in the Sirte Basin, as well as field analogues in Tunisia. MOG has identified a portfolio of mature prospects in the Lower Eocene/Paleocene sequence with reserves potential. The top four prospects have combined un-risked potential oil in place of between 1 billion barrels (mean case) and 1.5 billion barrels (upside case).
The 1,012 km2 of long-offset 3D seismic data have yielded positive results, improving the seismic imaging of the shallower section. Importantly, the data have also allowed imaging of the deeper syn-rift and pre-rift Cretaceous and Jurassic sequences for the first time, thus enabling leads to be defined in these sequences.
The result of interpreting these data has yielded three main target horizons:
· the more mature and shallower Lower Eocene horizon, where four main prospects and one lead have been identified in the area covered by the 3D seismic dataset only, with un-risked potential oil in place of up to 1.5 billion barrels (upside case) and Prospective resources of approximately 300 million barrels. Moreover, four leads are identified in Area 4, which are not covered by the 3D seismic data, with un-risked potential oil in place of 5 billion barrels (mean case) and Prospective resources of approximately 1.15 billion barrels;
· the Middle Cretaceous horizon, where three leads have been identified that indicate an un-risked potential oil in place of 200 million barrels (mean case), and Prospective resources of approximately 50 million barrels; and
· a deeper, presumed Jurassic, horizon where the new 3D seismic data have revealed three large structural leads. Their prospectivity and risk/volumetric assessment are still ongoing.
MOG seeking partner
MOG is currently seeking a partner to fund its share of the first commitment well, expected to cost approximately USD 30 million, and anticipates finalising a farm-out arrangement prior to year-end. The first well is expected to target a large dip-closed prospect “Hagar Qim” that is predicted to comprise Lower Eocene/Paleocene ramp and reefal carbonates analogous to the Ashtart Field complex in Tunisia, and to the Intisar fields in the Sirte Basin, Libya. Work by MOG on the most recent long offset high quality 3D data set indicates Hagar Qim has potential recoverable Prospective resources of 130 to 200 million barrels of oil, assuming a recovery rate of 25 to 35%. The well is expected to take 60 days to drill to a target depth of 2,500 metres.
An extensive Basin Modelling study has recently been finalised covering source rock presence, maturity, hydrocarbon migration and filling of the prospects. The results are positive, confirming the capability of the expected oil-prone source rocks, in particular the Lower Fahdene Formation (Albian) and the Bahloul Formation (Cenomanian-Turonian) to potentially generate substantial volumes of hydrocarbons for migration into the identified prospects from the principal kitchen area, represented by the Melita-Medina graben and its extension to the south of Area 4.
Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:
“We believe our acquisition of LGOI’s residual 10% equity will help facilitate the current farm out process in respect of the licence, which we aim to complete prior to 2012 year end. We are excited about the prospectivity of Area 4 offshore Malta and look forward to progressing the first exploration well with a new strategic partner, thereby enabling us to actively pursue further exploration of the licence with the drill bit.We believe that this news, together with the progress announced separately today on our Italian Ombrina Mare Field, position the company to maximise the value of two key assets for the Company.”
The Company’s selected Independent Competent Person, ERC Equipoise Ltd, is currently finalising its interpretation of the prospectivity and economic viability of Area 4, which is due to be completed by the end of September.
Press Release, August 13, 2012