Petronas' bid to farm in to a Celtic Sea block offshore south east Ireland has been approaved by the Irish Government - the firm is now firming-up drilling plans.
Through its 100%-owned subsidiary Kinsale Energy, the Malaysian firm will become operator with an 80% stake in the SEL 4/07 license. As part of the deal, it will fund 100% of the costs of drilling a well on the Midleton prospect, estimated to potentially have up to 330 Bcf gas initially in place/268 Bcf recoverable, according to Landsdowne.
Should the well be tested, Kinsale Energy will also fund Lansdowne's share of the testing costs, up to US$2.5 million (net).
Kinsale Energy has started working on well planning and further announcements will be made in due course.
License 4/07 incorporates part-blocks 49/11, 49/12, 49/17 and 49/18 immediately south-east of the Kinsale Head gas field along the axis of the North Celtic Sea Basin. The license encompasses an area of 542sq km.
The Midleton prospect is about 20km northeast of the Kinsale Head gas field (c. 1.7 Tcf reserves) and also 20km to the east of the Ballycotton gas field (c. 60 Bcf reserves).
Kinsale Energy, (formerly Marathon Oil Ireland), has been producing natural gas from its facilities off the Old Head of Kinsale since 1978. The company was acquired by Petronas in April 2009. Kinsale Energy also operates the Kinsale Head, Ballycotton and Seven Heads gas fields in the Celtic Sea and a natural gas storage field (Southwest Kinsale).
Lansdowne CEO Steve Boldy said: "We are pleased to receive the consent from the Irish Government for the farm-out of License 4/07 to Kinsale Energy and look forward to drilling the Midleton gas prospect.
"Much of the focus on Lansdowne's Celtic Sea assets in the last couple of years has been on the oil in Barryroe and whilst this remains the core of our portfolio, we continue to see great potential in searching for more gas in the basin. Gas prices remain robust and security of supply continues to be a concern, so any additional volumes we can discover and bring on-stream will be very valuable."
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