Elixir Petroleum Limited has agreed to acquire UK-based Hunter Petroleum’s 100% working interest in the relatively high risk North Sea Block 211/22b for initial consideration of 250,000 Elixir ordinary shares, 500,000 options and £100,000 cash. The small cap explorer said that the block being acquired is located in the Northern North Sea within the prolific Viking Graben of the East Shetlands Basin.
"It is surrounded on all sides by producing oil fields, many of them classified as giant fields with 500 million barrels of reserves, and lies immediately east of Shell’s North Cormorant oil field," the group said.
A large Upper Jurassic stratigraphic prospect, named Swaledale, has already been identified on the block. The group claims that the Swaledale feature is well defined by good quality 3D seismic data and has reserves potential in excess of 200 mmb, if hydrocarbons are present. It is a relatively high risk but potentially very high return target of company-maker size.
The directors concluded they are confident that the drilling of an exploration well on Swaledale can be farmed-out over the next 12 months. "The company’s interest would thereby be diluted to a more appropriate level given the high risk-high reward nature of the play," the group said. Elixir has until October 2005 to commit to the drilling of an exploration well or else surrender the licence.
Source: Shaw Stockbroking
