Nine ‘frontrunners’ for Fastnet assets

Nine parties have expressed serious interest about investing in the Celtic Sea and onshore Moroccan assets of Irish exploration firm Fastnet Oil & Gas.

Nine ‘frontrunners’ for Fastnet assets

The Dublin-based company yesterday said, via a presentation for investors, that ongoing farm-out negotiations regarding its Tendrara-Lakbir field in Morocco and its numerous Celtic Sea prospects are “well under way”, adding that there are currently “nine frontrunners” in the picture.

The company said it is reviewing a number of “new niche opportunities” onshore in eastern Africa.

Since the positive results from a 3D seismic survey, Fastnet said there has been “significant interest” in its Celtic Sea licences; the main ones of which are the Mizen and Deep Sea Kinsale prospects.

“The farm-out will validate the quality of Fastnet’s portfolio and crystallise value,” the company said.

It expects to recoup costs of up to $22m (€16m) from the Celtic Sea deal and begin a multi-well drilling programme in 2016.

In a separate stock exchange statement, Fastnet said it has successfully renegotiated its option agreement relating to the highly anticipated Deep Sea Kinsale prospect.

The company’s option agreement has now been extended to the end of next March, with the maximum time limit for a commitment to drill now the end of 2016. The previous time limit had been the end of this year.

Kinsale Energy is a subsidiary of Malaysian group Petronas, with which Fastnet signed an initial option agreement at Kinsale early last year.

Kinsale Energy’s right to increase its working interest in the asset — by up to 15%, free of charge should there be a commercial development — has now been removed. Fastnet’s net equity interest in the Kinsale prospect will be fixed at 60% if it funds 100% of the project.

“The extension of the deadline to exercise the option and the commencement of a well, works well with our timeline to complete a farm-in transaction from our ongoing process,” said Fastnet managing director Paul Griffiths.

He added that the new terms “greatly improve” the economics of the project.

In Morocco at the Tendrara field — a hotly anticipated asset covering 14,500sq km in the north-east of the country, which could transform it from a near total importer of gas to a net exporter — Fastnet is looking to drill two wells next year, targeting 892bn cubic feet of gas.

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