Elixir Petroleum Limited has today announced that it has concluded a Farm-out Agreement with Nexen Petroleum U.K. Limited, a wholly owned subsidiary of Nexen Inc., and Heads of Agreement with Gas Plus Italiana S.p.A. to farm-out part of its interest in UKCS Block 15/13b.
Under these agreements, and the recently announced agreement with Albion
Petroleum Limited, Elixir will retain a 13.125% interest in the block and its share of the costs of an exploration well will be fully funded by Nexen, Gas Plus, and Albion.
Nexen will become operator of the licence and earn a 50% interest in the block and Albion and Gas Plus will both earn 6.25% interests. Granby Oil & Gas plc, through two group companies, is also farming out part of its interest on the same terms as Elixir and will retain a 24.375% interest.
The exploration well, to be operated by Nexen, will be drilled on the Guinea prospect and is planned for the last quarter of 2006. Nexen has a suitable rig under contract and has already conducted the site survey. The well will be drilled to a depth of approximately 1,600 metres true vertical depth subsea.
The Guinea prospect is a robust four-way dip closed Palaeocene structure, which lies on trend with fields such as Balmoral and Dumbarton. The block is located some 20 kilometres north east of the Piper oil field in a water depth of approximately 150 metres. In 2005 a discovery well, operated by Nexen, was drilled on a Palaeocene prospect named Yeoman in Block 15/18b to the south of Block 15/13b.
The assignment of the licence interests and transfer of operatorship to Nexen are subject to the approval of the Secretary of State for Trade & Industry. The assignment of the licence interests to Albion and Gas Plus are also subject to the
execution of fully termed farm-in agreements, execution of the Joint Operating
Agreement and approval of the Secretary of State for Trade & Industry.
