LONDON -- Noble Energy has agreed farm-in terms for various licenses held by Falkland Oil and Gas Ltd (FOGL) south and east of the Falkland Islands. The transaction is estimated in the range $180-230 million. The concessions extend over a total of 40,000 sq km (15,444 sq mi).
Noble will take a 35% interest except in all the northern area licenses bar two excluded areas. The latter, to be delineated geographically and stratigraphically, comprise the Loligo complex (a large Tertiary aged stratigraphic trap with multiple reservoir objectives) and the Nimrod-Garrodia complex. The semisub Leiv Eiriksson spudded the first well last Friday on Loligo, 200 km (124 mi) east of the islands.
Noble will not participate in certain stratigraphic horizons in these excluded areas, but will participate in other horizons in these areas. And it will assume operatorship from FOGL of all northern permits, minus the excluded areas early in 2013.
The company will also take a 35% stake in the southern area licenses, becoming designated operator no later than early 2014.
FOGL will propose drilling the Scotia prospect in the northern area licenses during 4Q 2012, immediately following completion of the Loligo well. In exchange, Noble will pay
60% of the Scotia well costs, including associated costs incurred last year. A $25-million cash contribution is to be paid in January 2013, largely covering certain historical costs.
If this year’s drilling proves fruitful, two 3D seismic surveys are likely to be acquired over the northern and southern area licenses starting early in 2013. A next wave of exploratory drilling could follow in late 2014 and may include up to four wells.
Charles D. Davidson, Noble Energy's chairman and CEO, said: "After careful study, we believe this region is very consistent with our new ventures exploration strategy of entering regions that provide prospects that are not only material in size, but also where initial success can de-risk subsequent opportunities.
“In this particular case we have already identified numerous oil leads on 2D data with an unrisked gross resource potential exceeding 6 Bbbl of oil. Once completed, this transaction will increase our worldwide leasehold by over 70% gross and 40% net."