DUBLIN, Ireland – Fastnet Oil and Gas (AIM: FAST) has executed an exclusive option agreement with Petronas subsidiary Kinsale Energy to farm into the Deep Kinsale prospect offshore southern Ireland.
This applies to geological formations from a depth of 4,000 ft (1,219 m) subsea below the producing Kinsale Head gas field, defined by a sub-area of Petroleum Lease No. 1. The sub-area covers parts of blocks 48/20, 48/25, 49/16, and 49/21.
Fastnet has agreed to acquire new seismic by year-end and to complete geological and engineering studies. In addition, it will have an exclusive option exercisable before Sept. 30, 2014, to drill a well on or before Nov. 30, 2015, to test the Purbecko-Wealden reservoirs, which are productive in the nearbyProvidence Resources-operated Barryroe field.
The farm-in well will be drilled to a provisional depth of 8,000 ft (2,438 m) subsea. On completion, Fastnet can earn a 60% interest in the Deep Kinsale sub-area by funding a well test. However, if a commercial development results, Kinsale Energy has the option to lift its interest by 5% once production exceeds 100 MMboe, by a further 5% once production exceeds 150 MMboe, and a further 5% past 200 MMboe.
Marathon drilled the first 48/25-1 well at Kinsale Head in the North Celtic Sea basin in 1970. In 1972, the 48/25-2 and 48/20-1a wells were drilled to appraise the Kinsale Head structure updip from 48/25-1 at the shallow Greensand reservoir level. This led to discovery of the Kinsale Head gas field, which came onstream in 1978.
Recent studies by Fastnet of theMizzen and Shanagarry offshore licensing options have improved regional understanding of the structural and stratigraphic controls governing distribution of the Purbecko-Wealden oil-bearing reservoir sequences.
Fastnet plans to shoot a minimum of 500 sq km (193 sq mi) of 3D seismic over the Kinsale Head area during the first half of 2013, with CGG as its preferred seismic contractor. This will be the first 3D survey over Kinsale Head to target the deeper oil and gas potential. Fastnet aims to de-risk the deep structure through better seismic imaging of both the structure and potential variations in reservoir thickness and quality.