Nautical makes pitch for Nemo

Nautical Petroleum has entered into a farm-in agreement for a license in the North Celtic Sea off southern Ireland.

Offshore staff

LONDON -- Nautical Petroleum has entered into a farm-in agreement for a license in the North Celtic Sea off southern Ireland.

The company will acquire an interest of up to 65% in Standard Exploration License 2/07 containing the Nemo heavy oil discovery, pending approval from the Irish government.

Nemo, discovered in 1974, is around 60 km (37 mi) offshore in a water depth of around 90 m (295 ft). The16o API oil accumulation has estimated potential resources of up to 230 MMbbl.

Operator Providence Resources and its partners have agreed to farm-out up to a 65% equity interest in two stages to Nautical.

In return for an initial 25% stake, Nautical will fund and perform studies into the feasibility of a development. It will have a further option to increase the stake to 65% and assume operatorship if the partners decide to drill an appraisal well by end-2011, in which case Nautical would fund the entire cost.

Providence currently holds a 72.5% interest in the license, with Atlantic Petroleum assigned 18.3%, and Sosina Exploration 9.2%.

09/28/2010

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