Antrim to regain working interest, reserves and operatorship in Fyne; updates other North Sea operations
Monday, Apr 16, 2012Antrim Energy Inc. (TSX:AEN) (AIM:AEY) ("Antrim" or the "Company") Antrim, an international oil and gas exploration and production company headquartered in Calgary, Canada, today announced that, under the terms of the Joint Operating Agreement (the "JOA"), Antrim will regain working interest and reserves and anticipates regaining operatorship in UK Central North Sea licence P077 Block 21/28a (the "Fyne Licence") from Premier Oil UK Limited ("Premier") at no cost.
Antrim's current working interest in the Fyne Licence of 35.1% will increase to between 58.4% and 100%, contingent on the election by the other party to the JOA. The continuance of the Fyne Licence and the increase in working interest is subject to the approval from the UK Department of Energy and Climate Change ("DECC") of the working interest and operatorship change. DECC is expected to make this determination in the coming weeks.
In the meantime, Antrim is preparing a Field Development Plan ("FDP") for the Fyne Field. Approval of the FDP by DECC will allow Antrim to proceed with the development and achieve first oil in late 2014. The FDP will contain an updated reserve estimate, production profile and details of the production facility. The proposed production facility is expected to use a small floating SPAR system. Atkins Oil and Gas, a major engineering and design firm based in the UK and a recognized industry leader in the design of floating production, storage and offloading units, is currently completing a concept study for use of a SPAR at Fyne.
The production facility will be designed to handle gross peak production of approximately 15,000 barrels of oil per day. The Fyne development is expected to be phased to minimize initial capital expenditures and allow early production revenue to fund additional development, including water injection and additional producing wells. This is similar to the approach being used by Antrim and partners to develop the Causeway Field in the Northern North Sea (Antrim working interest 35.5%). The first phase of the Fyne development is expected to include the re-completion of the existing wells in Northwest and Central Fyne for production. Both wells are expected to be equipped with electrical submersible pumps to maximize delivery in the initial production period. If approved, fabrication of the SPAR would begin in 2013. The facility would be designed to be reusable, minimizing future modifications required for redeployment to other fields in the Greater Fyne Area or to similar small fields in the UK North Sea.
Production startup from the Causeway Field is scheduled for the third quarter this year. Pipe laying is scheduled to commence in mid-April, and a rig has been contracted for well completions, scheduled to begin in mid-June. A FDP for the adjacent Fionn Field (Antrim working interest 35.5%) has been submitted to DECC, with approval expected mid-2012. Average first year production from Causeway is anticipated to be 3,000 barrels of oil per day net to Antrim, providing significant cash flow for future oil and gas exploration and development activity. Antrim remains debt free.
In other North Sea operations, Antrim has been informed by Operator Premier that a contract has been signed with Awilco Drilling Limited for use of the WilPhoenix semi-submersible drilling rig to drill an exploration well on the Cyclone prospect in Central North Sea Block 21/7b (Antrim working interest 30%). This well will target the Tertiary Cromarty sandstone at approximately 5,000 feet true vertical depth. A site survey is expected to proceed in late April 2012, with drilling anticipated in the second half of 2012. The block was acquired by Antrim and Premier in the 26th Seaward Licensing Round, as announced October 28, 2010.
Additionally, TAQA Bratani Limited ("TAQA") is proceeding with plans to drill an exploration well on the Contender prospect Block 211/22a Contender Area (Antrim working interest 8.4%), with drilling expected in June, 2012. Under the terms of the farm-out agreement with TAQA (as previously announced August 25, 2011), drilling costs will be completely funded by TAQA. The well will be drilled from the TAQA-operated Cormorant North Platform, targeting the Jurassic Brent sequence of sandstones at a depth of approximately 12,000 feet true vertical depth and approximately two kilometres east of the Cormorant North Field.
Stephen Greer, Antrim CEO, commented: "We are very pleased to increase our interest in the Fyne Field and associated licence. Over the past year, our partners in Fyne have invested over $32MM, funding appraisal drilling and the evaluation and design of potential production infrastructure. The result is that the field is now fully appraised and contingent on the production facility design work, meets Antrim's economic criteria. The current production design work being carried out by Atkins is applicable not only to the Fyne Field, but may also have a significant impact on other small previously 'stranded' sub-20 million barrel reserve fields in the UK North Sea."
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