Offshore staff

CALGARY, Alberta -- Maersk Oil has exercised its option to farm into a high-pressure/high-temperature play in two blocks in the UK central North Sea.

Blocks 29/4b and 29/5e, operated by Ithaca Energy (UK), are both in the Greater Stella Area. Under the agreement, two deep exploration wells will be drilled, one on each block, with Ithaca covered for all costs up to the end of the first well on each block.

The outline terms of the farm-out agreement include the following conditions:

• Maersk Oil to be granted a 95% equity interest in the deep horizons below the Base Chalk in each of the exploration blocks drilled

• The transaction applies strictly applies to the deep section, with Ithaca retaining 100% equity interest in the shallow section (above the Base Chalk) in both blocks.

Maersk Oil has experience in HP/HT drilling in this part of the North Sea. Ithaca remains responsible for the license obligations, which include acquiring and reprocessing of 3D seismic data, up to the point of Maersk Oil committing to drilling and earning an interest in either block.

The HP/HT play in neighboring blocks has delivered rich gas-condensate producing fields such as Elgin/Franklin, operated by Total, and Shearwater (Shell). Ithaca believes the combination of light oil (45° API and above) and wet gas could proliferate at greater depths within the Greater Stella Area. This play is thought to lie stratigraphically below three discoveries Ithaca is working on for development, Stella, Hurricane, and Harrier.

02/16/2010