Fastnet eyes Morocco suitors


Fastnet Oil & Gas is looking to wrap up farm-out deals by year-end both for its Celtic Sea acreage off Ireland and onshore Morocco licences that have reportedly attracted interest from nine potential suitors.

The London-listed independent disclosed on Monday it is now seeking partners on its Tendrara Lakbir petroleum agreement covering eight prospective exploration licences onshore Morocco, having kicked off the Celtic Sea farm-out process earlier this year.

The 14,500 square-kilometre licence area in Morocco’s Tendrara basin is estimated to hold gross recoverable gas resources of between 311 and 892 billion cubic feet in the existing TE-5 discovery as well as multiple prospects, according to Fastnet.

“Interest is already being received from major industry players who, in addition to the conventional gas targets, are also interested in the substantial, but as yet unexplored, shale gas potential,” the company said in a statement.

Fastnet holds an option to take a 50% stake in the overall licence area under a revised agreement with partner Oil & Gas Investment Funds that has been extended to 31 December.

The company said it aimed to enlist a partner to accelerate appraisal and development of the gas asset, while retaining a material stake in the project, with a view to a gas-to-power project or export via existing infrastructure.

Fastnet recently farmed out half of its 25% interest in the Kosmos Energy-operated Foum Assaka licence off Morocco to South Korean-listed SK Innovation under a deal that grants it a carry for drilling of two exploration wells of up to $100 million per well, having come up dry with the first probe, FA-1.

The well, drilled earlier this year by the rig Maersk Discoverer, had targeted the Eagle prospect with a pre-drill resource estimate of 360 million barrels but failed to prove up commercial hydrocarbon volumes, despite finding oil shows in the Lower Cretaceous.

Meanwhile, the company has gained “significant interest” from potential investors for its Celtic Sea licences – mainly covering the Deep Kinsale and Mizzen prospects - following positive results from 3D seismic, according to a report by the Irish Examiner.

It is looking to recoup $22 million from a farm-out deal on the acreage with the aim of launching a multi-well drilling effort in 2016.

The company last week secured improved commercial terms on an option agreement to farm into Deep Kinsale, which lies beneath the Kinsale Head gas field in the Celtic Sea.

Fastnet has been pursuing such farm-out deals to raise cash for ongoing exploration efforts, with executive chairman Cathal Friel complaining that a more “risk-averse” stockmarket climate has made it difficult to attract new investment.

“This sentiment is reflected in our share price and the board strongly believes that the market is not recognising the potential of our asset portfolio. However, we have a strong balance sheet and are well funded for our planned activities,” he stated.

The explorer reported a net loss of for the financial year ended 31 March of $2.6 million, versus $2.1 million a year ago, and held cash reserves of $19.9 million at 31 July.

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