Premier agrees to fund Oates well

Offshore staff

LONDON -- Premier Oil is set to become operator of UK Central North Sea block 22/19c following a farm-in agreement with current license holder Serica Energy.

Under the arrangement, Premier will fund an exploration well on the Oates prospect. Subject to rig availability, this should be drilled mid-year to a sub-surface depth of around 10,000 ft (3,048 m).

Oates is a large Palaeocene Forties sand stratigraphic trap identified by 3D seismic. It exhibits similar features to other nearby Forties sand discoveries such as the Serica-operated Columbus and the Premier-operated Huntington.

Premier estimates Oates’ unrisked resources in the range 25-107 MMboe. There is further potential on the block in the Bowers prospect, rated in the 10-65 MMboe range.

Serica also is negotiating a farm-out of its 100%-owned Conan prospect in East Irish Sea blocks 113/26b and 113/27c. The company hopes the farm-in partner will pay 70% of the costs of a planned well, in exchange for a 35% interest in the license.

01/05/2010