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Montevideo, May 28th 2018 - 01:21 UTC

US Noble Energy farms in to explore for oil in east and south Falklands’ waters

Monday, August 6th 2012 - 21:18 UTC
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Charles D. Davidson, Noble’s Energy chairman and CEO, “we have identified numerous oil leads Charles D. Davidson, Noble’s Energy chairman and CEO, “we have identified numerous oil leads
 The Leiv Eiriksson last Friday spudded the first well for FOGL and Edison in the Loligo prospect The Leiv Eiriksson last Friday spudded the first well for FOGL and Edison in the Loligo prospect

London AIM listed Falkland Oil and Gas announced it has reached an agreement to farm out a 35% stake in most of its Falkland Islands’ exploration licenses to the US Noble Energy to help fund its drilling plans off the Islands.

Likewise FOGL announced the beginning of drilling at the large Loligo prospect to the south of the Islands.

Noble Energy, Inc. (NYSE: NBL), is a leading US global exploration and production company and the licence position consists of 40.000 square kilometers.

Under the deal, Noble will pay a total of between 180 and 230 million dollars over the next three years on exploration and drilling in the Falklands’ blocks and to cover some historical costs on the blocks, FOGL said in a statement.

The farm-out deal with Noble is FOGL second this year after selling a 25% interest in its northern area licenses and a 12.5% stake in its southern area blocks to Italian energy company Edison in June.

According to the release Noble will farm-in to the Northern Area Licences for a 35% interest except for two excluded areas. FOGL will continue as operator of the entire Northern Area Licences until early 2013, when operator-ship of the farm-in area will be transferred to Noble.

The excluded areas within the Northern Area Licences will be delineated both geographically and stratigraphically and comprise the Loligo complex and the Nimrod-Garrodia complex.

Noble will not participate in certain stratigraphic horizons in these excluded areas and FOGL will retain a 75% interest and operator-ship with Edison International Spa holding the remaining 25% interest. However, Noble will remain a participant in the excluded areas regarding other horizons.

Noble will also farm-in to the Southern Area Licences for a 35% interest, with FOGL continuing as operator of these licences until no later than early 2014, when Noble will become the designated operator.

FOGL will be proposing to the partners that the Scotia prospect in the Northern Area Licences will be drilled in the fourth quarter of 2012 immediately following the FOGL Loligo well.

Noble’s financial contribution comprises: 60% of the Scotia well costs, including associated costs incurred during 2011. A 25 million dollars cash contribution to be paid in January 2013 predominantly relating to certain historical costs; covering .60% of the costs of the Southern Area Licences commitment well; 45% of a discretionary exploration well, should Noble elect to participate in the well.

This brings Noble's total investment over the next 3 years at an estimated range between 180 million and 230 million dollars.

As a result of the post farm-out licensing, in the Northern Area, FOGL holds 40%; Noble (operator) 35% and Edison, 25%, In the Southern area, FOGL (operator) 52.5%; Noble 35% and Edison, 12.5%.

According to FOGL release the new farm-out brings in another significant industry partner whose interests and expertise complement those of Edison. The farm out substantially improves FOGL financial position and in the event that the Loligo and Scotia exploration wells are drilled within budget, it is estimated that on completion of the wells FOGL cash balances will not be less than 200 million dollars which will provide the company with significant funds for additional exploration work.

Given suitable encouragement from the 2012 drilling results, this is likely to include two 3D seismic surveys to be acquired in the Northern and Southern Area licences commencing in early 2013. Further exploratory drilling is then anticipated to commence in late 2014 and may include a program of up to four exploration wells.

The farm-out to Noble is subject to the approval of the Falkland Islands Government.

“We are delighted that Noble is joining us in our exciting exploration program. Noble brings strong technical expertise and an excellent track record of exploration and development success”, said Tim Bushell, FOGL CEO.

”We have now brought in two highly respected international exploration and production companies and with this strong partnership in place, we have the financial and technical resources to help realize the potential from our large acreage position in the Falkland Islands“ he added.

Charles D. Davidson, Noble Energy's Chairman and CEO, said that Noble Energy is looking forward to working with FOGL and Edison in this new exploration joint venture. “After careful study, we believe this region is very consistent with our new ventures exploration strategy of entering regions that provide prospects that are not only material in size, but also where initial success can de-risk subsequent opportunities. In this particular case we have already identified numerous oil leads on 2D data with an un-risked gross resource potential exceeding 6 billion barrels of oil. Once completed, this transaction will increase our worldwide leasehold by over 70% gross and 40% net”.

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL. Further information is available at www.nobleenergyinc.com.

FOGL also announced the Loligo exploration well 42/07-01, spudded on Friday 3 August 2012 and located approximately 200 km east of the Falkland Islands. FOGL is the operator of the well, holding a 75% interest, together with its joint venture partner Edison International Spa, who holds the remaining 25% interest in licence PL028. It is the first of a two well exploration program using the Leiv Eiriksson semi submersible drilling rig. It is anticipated that the well operations working in 1.300 meters deep water will be around 60 days.
 

Financial Tags: FOGL, NBL.

Top Comments

Disclaimer & comment rules
  • Monkeymagic

    Permanant members of the UN Security Council

    US: Noble
    France: EDF
    UK: RKH, FOGL, DES and BOR

    Hmm...nice

    Aug 06th, 2012 - 09:37 pm 0
  • Beef

    Also UK : PMO

    Now Timmer two fingers needs to sue:

    RKH, DES, ARG, FOGL, BOR, PMO, Noble, EDF, Edison Spa and every bank and broker associated with them. LMFAO!

    Now he just has to choose a court with jurisdiction ;-) He might choose one with a kangaroo in it?

    Aug 06th, 2012 - 10:07 pm 0
  • Islander1

    Think-Marcos - ? - Thought we would have heard from you by now about nails and thieves etc?

    Aug 06th, 2012 - 11:54 pm 0
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