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Fastnet Oil & Gas plc (FAST) is an independent oil and gas exploration company focused on identifying early stage exploration and appraisal opportunities in Offshore Ireland and Africa. It is quoted on the AIM market of the London Stock Exchange and the Enterprise Securities Market (ESM) of the Irish Stock Exchange. Fastnet’s…
By Jamie Ashcroft
Fastnet Oil & Gas (LON:FAST) has unveiled a US$203mln farm-out deal with an associate of Korean conglomerate SK Group which sees the AIM quoted firm secure a ‘carry’ on the upcoming drill programme offshore Morocco.
The conglomerate, Korea’s third largest, will acquire a 12.5% stake in the Foum Assaka offshore contract area in return for covering Fastnet’s share of drilling costs, capped at US$100mln per well.
Kosmos Energy, the project operator, is expecting that drilling of the first of those well’s will get underway in the first quarter of next year.
The Eagle-1 exploration well is targeting an estimated 360mln barrel prospect and it is set to be one of next year’s closely followed programmes for investors.
Kosmos’s own farm-out to BP in October had already alerted investors to the potential of this opportunity, which located in the waters off Morocco is fast becoming something of a hotspot for exploration.
“The farmout of half of our Interest in the Foum Assaka Block provides Fastnet with a very low cost opportunity to participate in the drilling of a high profile, potentially high reward well in what we view as one of the industry’s hottest new exploration areas,” said Carol Law, executive director of Fastnet.
“Fastnet has secured excellent commercial terms and has ensured that the carried equity interest has running room in the event of a follow up appraisal or exploration well being drilled.”
The company will also receive a separate US$3.2mln payment for back costs as part of the deal, as well as 25% of costs incurred in the period between October 1 and January 1.
Managing director, Paul Griffiths said: “The farm-out agreement significantly strengthens Fastnet’s balance sheet and ensures that our exciting offshore and onshore drilling programme in Morocco in H1 2014 can be optimally executed in a manner consistent with the company’s stated strategy of returning value to shareholders in the event of early drilling success.”
