Exploration firm Island takes control of Albanian oil and gas prospect

DUBLIN-based exploration company, Island Oil & Gas has assumed total control — via its Island International Exploration BV subsidiary — of the Durresi Block prospect located off the coast of Albania.

Island already owned a 50% stake in the Durresi prospect, but yesterday announced that it has acquired the remaining share from Lundin Mining’s Albanian subsidiary for an undisclosed sum. The deal has received formal approval from Albania’s national agency of natural resources.

In addition, Island has agreed a farm-out agreement with the Australian exploration company, Beach Petroleum, which is still awaiting regulatory approval. This will see Beach take a 25% equity stake in the Durresi prospect in return for it providing the development costs for the project.

The Durresi Block stretches for 4,200sq km along Albania’s Adriatic coastline. It features several undrilled oil and gas prospects.

“We’ve strengthened our position offshore Albania in an area that is attracting renewed industry interest,” commented Island Oil & Gas chief executive Paul Griffiths.

Management at Beach Petroleum, meanwhile, have suggested that exploration at the Durresi Block has the potential to yield reserves of more than 100 million barrels of oil.

Although Island’s share price in London was largely static at 35p yesterday, this news comes at an exciting operational time for the company.

Recently, it announced that the projects it has close to completion stage off the south-coast of Ireland — in particular its fields at the Old Head of Kinsale and Schull — have significantly larger reserves than first estimated.

It also recently announced an expansion of its presence in eastern Europe via the acquisition of a 50% equity stake in a number of assets in Moldova, currently owned by local company, Valiexchimp.

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