MercoPress. South Atlantic News Agency

Second oil rig to join Falklands’ oil exploration round next year

Semi-submersible Eirik Raude is currently drilling offshore Ghana

A second oil rig is scheduled to begin exploratory drilling of two wells in Falkland Islands waters in a year’s time following a letter of intent signed by Borders & Southern Petroleum with Ocean Rig UDW this week in Houston.

According to a corporate release the ‘at least two wells’ with up to ‘three optional’ are to be drilled in the Southern Falkland basin Darwin and Stebbing prospects by the Eirik Raude dynamically positioned, harsh environment semi-submersible rig.

The Eirik Raude rig is currently working on the Jubilee development offshore Ghana and on completion of its drilling program should be mobilized to the Falkland Islands in the fourth quarter of 2011.

The company’s Environmental Impact Statement, covering the two proposed drilling sites in the South Falkland Basin acreage was approved last June by the Falklands Executive Council

Borders & Southern Petroleum which was formed in 2004 holds five licenses 150 km southeast of the Falkland Islands (19.598 square kilometres) awarded by the local government.

To date, the Company has fulfilled all work program obligations of the production licences, having acquired, processed and interpreted 2,862 km of 2D seismic data and 1,492 km of 3D seismic data, as well as having commissioned and completed numerous technical studies.

In November 2009 Borders & Southern Petroleum raised £113.1 million net of expenses through a placing by Mirabaud, Ocean and Panmure Gordon with institutional investors of 234,234,234 new Ordinary Shares in the Company at 50p per share.

When Eirik Raude arrives it will be the second rig to have operated in Falklands’ water during the current exploratory round.

“Ocean Guardian” contracted by Desire Petroleum has been drilling in Falklands’ waters since February with at least two wells considered successful, Desire’s Liz prospect (gas) and Rockhopper’s Sea Lion prospect (oil).

Currently six companies are involved in hydrocarbons exploratory operations in the Falklands: Desire Petroleum; Rockhopper Exploration; BHP Billiton with associate Falkland Oil and Gas Ltd; Argos Resources and Borders & Southern Petroleum.