Kosmos makes dual play for licenses offshore western Ireland

Offshore staff

DALLAS – Kosmos Energy (NYSE:KOS) has agreed to two farm-ins to frontier exploration acreage offshore western Ireland.

The company will take a 75% operating interest from Antrim Energy in licensing option 11/05 in the Porcupine basin offshore Ireland’s west coast.

In exchange, Kosmos will carry the full costs of a planned 3D seismic program over the Skellig block and reimburse Antrim for some of the exploration costs incurred on the blocks to date. Antrim will retain the remaining 25% interest.

Assuming approval from Ireland’s Department of Communications, Energy and Natural Resources of Ireland (DCENR), the partners hope to convert the licensing option to a frontier exploration license, and to gain approval as soon as possible for the seismic acquisition.

Antrim was awarded its licensing option under Ireland’s 2011 Atlantic Margin Licensing Round. It covers blocks 44/4, 44/5 (part), 44/9, 44/10, 44/14, and 44/15, a total area of 1,409 sq km (544 sq mi). To date Antrim has reprocessed and interpreted 2D seismic over the blocks and identified a Cretaceous deep-sea fan complex, which it believes is similar in seismic character to recent Cretaceous discoveries offshore West Africa.

The license next to the Skellig block contains the Dunquin North and South prospects, estimated by partners Providence Resources and Sosina Exploration to contain potentially more than 1,700 MMboe of natural gas and gas condensate in a Cretaceous target. ExxonMobil, operator of the license, is due to drill an exploration well this month.

Kosmos also has agreed to take an 85% operating interest from Europa in licensing options 11/7 and 11/8 in the South Porcupine basin. The transaction calls for Kosmos to fully fund costs of a 3D seismic campaign on each license, and to pay 85% of costs incurred by Europa to date.

If the two parties opt to progress to an exploration drilling phase on one or both of the blocks, Kosmos additionally will bear the full costs of the first well on each block. These have investment caps of $90 million and $110 million, beyond which the two companies would share the balance.

LO 11/7 and LO 11/8 each extend over 1,000 sq km (386 sq mi). Both are undrilled and have been mapped using existing 2D seismic data. Europa has identified two prospects in the Lower Cretaceous stratigraphic play: Mullen in LO 11/7 and Kiernan in LO 11/8.

4/19/2013

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