ROME – Mediterranean Oil & Gas (MOG) has secured an 18-month extension to the first exploration phase of a production sharing contract offshore Malta.
Phase 1 of the Area 4 concession (blocks 4, 5, 6 and 7) now runs through January 18, 2013. The company is also negotiating with a third party to farm out 75% of the working interest held by its wholly-owned subsidiary, Phoenicia Energy.
Malta’s government based the extension on the following conditions:
•No change to existing level of minimum exploration expenditure ($5 million)
•Commitment to acquire 1,000 sq km (386 sq mi) of 3D seismic by January 2012
•A penalty of $5 million if a well is not drilled by the extension expiry date, unless there is a technical justification not to do so
•Payment of an extension bonus of $0.3 million in July 2011.
MOG and the government agreed the initial terms in 2008 following a geological and geophysical assessment of the PSC area.
The PSC, which runs for 30 years, covers a 5,700-sq km (2,201-sq mi) area extends south from Maltese waters to the internationally recognized median line with Libya.
Malta is surrounded by large proven petroleum systems offshore Libya, Tunisia, and Sicily. According to MOG’s studies, the geology within the PSC area has potential for petroleum systems related to the Tunisian and Libyan hydrocarbon plays and fields.
These systems provide analogues for Area 4. Source, reservoir and seal rocks in the PSC area are similar in age and character to those developed in Tunisia and Libya.
The PSC area is covered by 2D seismic data of varying vintage and a 3D survey over the western part of block 7. Since 2007, MOG has acquired and processed 1,012 km (391 sq mi) of new 2D seismic, reprocessed in time and depth the existing 3D data set, and reinterpreted the entire 2D and 3D seismic data available over the area.
It has delineated four prospects and five leads - the three most mature prospects are in Block 7 along the ramp setting of the Melita – Medina Graben, close to the Libya Pelagic basin.
MOG’s estimates the total un-risked potential of the PSC area at around 5 Bbbl of oil in place, and un-risked prospective recoverable oil resources of around 1.5 Bbbl.