Orca takes stake in Elsa permit

Orca Exploration Group has agreed to farm into the B.R268.RG permit in the Adriatic Sea off central Italy.

Offshore staff

DUBLIN, Ireland -- Orca Exploration Group has agreed to farm into the B.R268.RG permit in the Adriatic Sea off central Italy.

Under the agreement, operator Petroceltic International will cede Orca a 15% interest. In exchange, Orca will pay 30% of drilling and completion costs for the planned Elsa-2 appraisal well, due to spud this fall, up to a maximum of $11.52 million.

Orca will also pay Petroceltic back costs related to the well of up to $500,000. On completion of the well, the two parties will fund all future costs for the permit work program in proportion to their participating interests.

Subject to approval from Italy’s regulatory authorities, Orca will be entitled additionally to 15% of Petroceltic’s 11 exploration permits in the Adriatic.

Petroceltic expects the full cost of the Elsa-2 well to reach $37 million, including testing. Agip discovered the field in 1992, encountering a 65-m (213-ft) oil column in the Lower Cretaceous Maiolica formation at a subsurface depth of 4,500 m (14,764 ft).

Recoverable oil is estimated at 100 MMbbl. If results from Elsa-2 prove positive, a 3D seismic survey will follow. There are numerous other commercial oil accumulations nearby, including Rospo Mare and Ombrina Mare.

06/03/2010

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