Lansdowne and Island strike Celtic Sea deal

LANSDOWNE Oil & Gas, the anglo-Irish exploration company, has partially farmed -out one of its drilling licenses in the Celtic Sea to Dublin company Island Oil & Gas.

The deal — dependent on final approval from the Department of Communications, Energy and Natural Resources — covers four partial blocks of Lansdowne’s Standard Exploration Licence 4/07 in the Celtic Sea off the south coast.

The agreement will give Island the right to carry out drilling and testing for oil and gas in the area, take on overall operatorship of the assets and acquire a 58.34% equity interest in the licence.

Island’s chief executive, Paul Griffiths yesterday said that the area holds significant potential. The drilling work — which should get underway before the end of next month — will take place close to Island’s existing wells in the Old Head of Kinsale gas field, immediately to the south of this specific licence.

“Island recognises additional low risk gas potential along the Old Head Trend in an area close to existing infrastructure at Kinsale. Our studies in Old Head have significantly reduced exploration risk and have indicated that this part of the Celtic Sea Basin has the potential to contain material gas resources that, with synergies created by the development of infrastructure at Old Head, may lead to early development and increased near-term cash flow if successfully drilled,” he said.

Lansdowne’s chief executive, Steve Boldy added: “We are pleased to conclude this agreement with Island, which will allow the evaluation of the Old Head Trend to proceed in a co-operative and timely manner, commencing with the acquisition of new seismic data, currently underway. We look forward to working with Island with a view to early development of the gas potential in the Old Head Trend.”