OilVoice - Elixir Petroleum Reports Waiver of UK Drill-or-drop Commitment

Elixir Petroleum Reports Waiver of UK Drill-or-drop Commitment

Saturday, April 25, 2009

Elixir Petroleum Limited, the international oil and gas exploration and production company announces that the UK Department of Environment and Climate Change (“DECC”) has agreed to waive the “drill-or-drop” decision commitment date on Block 211/18b (Licence P.1381).

Background
The Licence was granted in late 2005 for an initial four year term, with a drill-or-drop decision required to be made by the end of the third year of the Licence term. If the well commitment was not made, the Licence would be relinquished at that point. If a well commitment was made, the well was required to be spudded prior to the end of the Licence term (being 21 December 2009).

As previously announced, the drill-or-drop decision date was extended by agreement with DECC to 21 April 2009. DECC has now agreed to waive the drill-or-drop commitment altogether. This means that a well is required to be spudded prior to 21 December 2009 in order to retain the Licence, and if this does not occur, the Licence will be relinquished at that date.

The Licence, which is located in the northern sector of the UK North Sea, contains the Leopard Prospect, one of the largest remaining undrilled oil targets in the North Sea, with a mean prospective resource estimate of approximately 350 million barrels.

Commenting on the announcement, Elixir’s Managing Director, Andrew Ross said:
“The granting of a waiver of the drill-or-drop decision date is a welcome development for Elixir and we appreciate the commercial approach that has been adopted by DECC in this matter. The waiver will allow us to continue the detailed discussions we currently have on foot with several interested parties with a view to securing a further partner to participate in the drilling of the Leopard Prospect.”

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