LONDON – Falkland Oil & Gas Ltd. (FOGL) has agreed to acquire fellow Falkland Islands offshore specialist Desire Petroleum. The deal values Desire at $99 million.
FOGL has various exploration licenses south and east of the islands, proven to contain gas, while Desire’s acreage is in the offshore North Falkland basin.
Assuming the transaction goes through, Premier Oil and Rockhopper Exploration have also agreed to a farm-in with FOGL for licenses PL004a and PL004c adjacent to the Premier-operatedSea Lion development in the North Falkland basin.
The two companies will carry FOGL’s share of costs for one exploration well on theIsobel/Elaine prospect in PL004a and another on the Jayne East prospect in PL004c, with respective potential resources of 1,078 MMbbl and 289 MMbbl.
Drilling is scheduled for 2014-2015, subject to finalization of a rig contract.
Aside from these wells, FOGL plans another in the North Falkland basin targeting the Zebedee prospect, and two more in the offshore South Falkland basin in partnership with Noble Energy and Edison International.
On completion, revised ownership in the two licenses will be as follows: