Highlights
- Rig contracted for Jaguar well
- Jaguar well spudded post quarter-end
- Unsuccessful Muness well in Block 21/4b
- Farm-out marketing underway for 22nd Round licences
- Farm-out activity commenced on Leopard and Panther prospects.
Activity overview - Operations
UKCS Block 211/22b – Jaguar Prospect (EXR 40%)
Following a farm-in agreement signed with DNO in July 2005, the semi-submersible drilling rig, Bredford Dolphin, was contracted in November for the Jaguar well on Block 211/22b.
The Jaguar prospect is interpreted as an Upper Jurassic stratigraphic trap to the northeast of Shell’s North Cormorant oil field. If hydrocarbon bearing, it has the potential to hold several hundred million barrels of recoverable oil reservoired within several sandstone units. The Jaguar well, designated as 211/22b-5, is to be drilled to a planned total depth of circa 4,000 metres which will take approximately 45 days, assuming no downtime.
Subsequent to the end of the December quarter, the Bredford Dolphin came on contract and was towed to the Jaguar location. Well 211/22b-5 spudded on 23 January 2006.
Under the initial farm-in terms DNO agreed to secure a 60% working interest in Block 211/22b by contributing 92.5% of the Jaguar well costs. Elixir retains a 40% interest and will contribute the remaining 7.5% of the well costs.
In a subsequent earn-in agreement announced on 30 November 2005, DNO will transfer a 10% interest in Licence P1067 to Rocksource, a Norwegian offshore technology company, in return for Rocksource funding 15.42% of the well costs.
UKCS Block 21/4b – Muness Well (EXR 7%)
During the quarter, Elixir earned a 7% interest in Central North Sea Block 21/4b by contributing to the costs of drilling the Muness exploration well.
Well 21/4b-6 was spudded on 30 November 2005 by the Sedco 712 rig and drilled to a total depth of 3,650 metres. The target Lower Cretaceous Kopervik sands were intersected close to prognosis but produced only minor gas shows. The well was plugged and abandoned. The Company is evaluating the prospectivity of the block before making any decision whether to retain or relinquish the licence.
Farm-out Program for 22nd Round Blocks
An intensive marketing campaign was commenced with alliance partner, Granby Oil & Gas, to farm-out interests in the jointly-held 22nd Round licences.
There has been a good response from prospective partners and several offers are under consideration. It is hoped that agreements can be concluded over the next few months which could lead to drilling activity on these licences later this year and in 2007.
23rd Rounds Award Blocks
Formal offers of the successful 23rd Round licence applications, including the licence documents, were received and accepted by the Company in January 2006.
Block 211/18b (Licence P1381) is a four year Traditional licence which contains the Leopard prospect. Although the application was made by Elixir, 20% of Elixir’s 100% licence interest is to be assigned to Sosina Exploration Limited, a wholly-owned subsidiary of the Odegaard Group, the Danish international provider of technology to the oil industry. State-of-the-art technical work undertaken by Odegaard during the licence application phase was a key factor in our success in securing the award.
Block 211/8b (Licence P1379) is a two year Promote licence awarded to Elixir (80%) and Sosina Exploration (20%) which hosts the Panther prospect.
An active farm-out marketing campaign for both Leopard and Panther will be implemented over the next few months.
Resignation of Deputy Chairman
Post quarter-end, on 25 January 2006 the Company announced the resignation of its Deputy Chairman, Mr Don Maloney with immediate effect.
Mr. Maloney, who has been a board member since the incorporation of Elixir and its listing on the ASX in mid-2004, is stepping down for personal reasons.
He was the founder Chairman of Elixir and then assumed the role of Deputy Chairman when the Company was admitted to AIM in May 2005.
Mr Maloney has made an invaluable contribution to the development of Elixir and the Board will miss his enthusiasm and wise counsel.
