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| | Elixir finalises North Sea farm-ins |  | | Friday, 2 June 2006 AUSTRALIAN junior Elixir Petroleum and its UK joint venture partner, Granby Oil & Gas, have farmed-out more equity in North Sea Block 15/13b to two large foreign petroleum companies. Under the first farm-out deal, Nexen Petroleum UK – a wholly owned subsidiary of Canadian major Nexen Inc – has agreed to become permit operator and earn a 50% interest in the block.
Meanwhile, independent Italian company, Gas Plus Italiana S.p.A, has signed a heads of agreement to take a 6.25% interest. Last month, Elixir announced that Canadian firm Albion Petroleum would take an identical interest.
Following the three deals, Elixir will have a 13.125% interest in the block, with its share of costs to drill one exploration well to be fully-funded by Nexen. Granby, which farmed-out part of its interests to the three companies on the same terms as Elixir, will keep a 24.375% interest.
Elixir managing director Russell Langusch said the company was "delighted" to have finalised the farm-out arrangements for this block, in which it kept a material interest without cost exposure.
The offshore exploration well, to be operated by Nexen, is planned for drilling on the Guinea prospect in the last quarter of this year.
Elixir said Nexen has now contracted a suitable rig and has already conducted the site survey. The well will be drilled to a depth of about 1600 metres.
Located about 20km north-east of the Piper oil field, the Guinea prospect lies in about 150m of water and is a robust, four-way dip-closed Palaeocene structure that lies on trend with fields such as Balmoral and Dumbarton.
Block 15/13b was awarded as a promote licence to Granby in the 22nd Licensing Round in December 2004. Under an alliance agreement, Elixir was entitled to earn a 35% interest.
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