Elixir to spud Jaguar prospect

Elixir Petroleum plans to drill its latest exploration well on the North Sea Jaguar prospect, weather permitting, in late January.

Offshore staff

(UK)- Elixir Petroleum plans to drill its latest exploration well on the North Sea Jaguar prospect, weather permitting, in late January.

The Bredford Dolphin semisub is currently moving to the location of the Jaguar well, designated as 211/22b-5. Assuming no downtime, drilling is expected to last 45 days, to a total depth of approximately 4,000 m.

The play at Jaguar, interpreted as a large Upper Jurassic stratigraphic trap in the Northern North Sea block 211/22b (License P1067), is a relatively new one to the UK sector of the North Sea. However, this type of play has been proven in an analogous geological setting on the Norwegian side of the North Sea. In addition, Elixir is looking intently at Jaguar due to the potential of several hundred million bbl of recoverable oil reserves within several sandstone units.

Elixir has a sign-in agreement in place with Norwegian independent DNO, in which DNO has secured a 60% working interest in Block 211/22b by contributing 92.5% of the Jaguar well costs. Elixir will contribute the remaining 7.5% of the well costs, and retains a 40% interest in the project.

DNO signed a subsequent earn-in agreement in November 2005 with Rocksource ASA, a Norwegian offshore technology company. In this agreement, DNO will transfer a 10% interest in License P1067 to Rocksource, in return for Rocksource funding 15.42% of the well costs. Once the transaction is approved by the relevant UK authorities, the license holders in P1067 will be DNO with 50% as operator, Elixir with 40% and Rocksource with 10%.

Elixir Managing Director Russell Langusch said of the prospect, "The Jaguar well could have a major impact on our Company if it proves successful. However, as a focused North Sea explorer, we are only too aware that exploration outcomes cannot be predicted. Hence we shall continue to pursue activities in all of our license areas, aiming at a multi-well drilling program over 2006-07 to optimize our chances of success."

01/23/2006

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