MercoPress. South Atlantic News Agency

Falklands’ Argos considering drilling finance options and confident about new exploration round

CEO Thomson: 40 additional leads still to be evaluated from the 3D seismic survey

Falkland Islands Argos Resources oil and exploration company have said that they are extremely well placed to participate in the next round of exploration drilling in the Falklands and they are continuing to consider various ways to finance drilling.

According to the AIM quoted Falklands based company their best estimate of un-risked potentially recoverable prospective resources on their licence area is around three billion barrels of oil, with 40 additional leads still to be evaluated. The highest estimate is 10.4 billion barrels of oil, the company said in its half-year statement.

Argos says that still to be undertaken on the 3D data includes, where appropriate, mapping potential reservoir sands within the Johnson gas discovery, which appears to extend into the licence area.

Chairman of Argos Resources Ian Thomson says that the 3D seismic data they have obtained is the best quality data seen in the basin to date. Thomson says that new studies have also confirmed that two proven oil source rocks within the licence area are mature for significant volumes of oil generation, and this has added to the improved estimated chances of success for most of the prospects.

Thomson points out that the company’s directors continue to actively consider various financing options to facilitate exploration drilling.

While financial results are not very meaningful for a company at this stage of development, the company said that they made a half-year loss of 1.1million dollars.

Argos principal asset is a 100% interest in production licence PL001 covering an area of approximately 1,126 square kilometres in the North Falkland Basin. The 3D seismic survey acquired in early 2011 covering the entire licence area identified of 52 prospects and 40 leads within the licence area.

The Argos licence area adjoins licences PL032 and PL004b. The Rockhopper/Primer Sea Lion oil discovery was made in licence PL032 in 2010 and a total of nine wells have now been drilled to complete the appraisal of this large discovery. An extension of the Sea Lion field into licence PL004b was proven by drilling in late 2011 and additional shallower stacked oil and gas accumulations above the Sea Lion field have also been proven in the Casper, Casper South and Beverley discoveries.

The presence of gas in these latest discoveries, together with gas in the Johnson discovery and gas condensate in the Liz discovery to the south points to a second deeper source rock generating commercial volumes of hydrocarbons into the basin, in addition to the Lower Cretaceous oil source rock, according to Argos half year report.