Island signs 50% deal in eastern Europe move

ISLAND Oil & Gas, the Dublin- headquartered exploration company is expanding its international presence to eastern Europe.

The company has signed a memorandum of understanding with the Moldovan company, Valiexchimp, that will see it buy a 50% equity stake in a number of assets in Moldova currently owned and operated by that company.

Valiexchimp will keep control of the other 50%.

The agreement also gives Island the rights to acquire a 50% stake in any oil and gas-producing assets owned by Valiexchimp in the Russian state of Tatarstan.

Island has the exclusive option on the various deals and has until the end of this month to ratify the joint venture agreement — and is likely to do so after it completes technical, legal and commercial due diligence (review).

To date, Island’s sole non-Irish based interests are in Morocco, Albania and the Netherlands.

The new oil and gas assets in Moldova are situated in the south of the country, close to the eastern Romanian border.

Although the area has not been extensively evaluated, it forms a continuation of an already established hydrocarbon producing area of the region.

Among the new assets Island is effectively signing up for a share of are the Valeni oil field, the Victorovca gas field, the

Comrat oil refinery — which has a capacity of 2,000 barrels of oil per day — five land-based drilling rigs and a number of oil and gas gathering pipelines as well as oil storage facilities.

Island said in a statement yesterday that it has entered discussions with potential investors to fund the deal so that “no financial obligation will accrue to the company’s shareholders”.

New investors will have the opportunity to participate in a new subsidiary of Island.

Meanwhile, Pan Andean — the Dublin-based and AIM-listed oil and gas producer — has been awarded its first exploration and production contract in Colombia. The company has signed a contract with the Agencia Nacional de Hydrocarburos, Colombia’s resource management agency, to explore the 35,000 hectare Antorcha block located in the prolific Middle Magdalena Basin. Pan Andean holds a 100% interest in the block.