Forest Gate Resources Inc. reports that it has entered into a joint venture agreement to acquire a 15% working interest in an off-shore international oil and gas prospect in the Celtic Sea located off the south coast of Ireland.
The 15% working interest is currently held by a private Calgary-based international oil and gas company called Arriba Capital Corp. The project operator is Providence Resources P.l.c. with headquarters in Dublin, Ireland. Providence is listed on the AIM Exchange (London) and IEX Exchange (Dublin). Providence is involved in petroleum exploration licenses in Ireland, UK, West Africa and the Gulf of Mexico.
"This is a breakthrough deal for Forest Gate," said Michael Judson, President and Chief Executive Officer of Forest Gate. "Although not in our core business area of diamond property acquisition and development, this opportunity is impossible to resist and a deal of this kind is a potential company-maker. We believe the Celtic Sea has enormous upside potential for oil and gas reserves."
"Higher priced oil, improved gas infrastructure in Ireland and improvements in related hydrocarbon exploration technologies suggest that this basin is ready for a second look," said Judson.
Providence Resources P.l.c. is the oil and gas exploration vehicle of Sir Anthony O'Reilly, one of Europe's leading industrialists. Sir Anthony has been a leading investor in offshore Ireland oil and gas since 1981.
"Our joint venture partners are well-established and have high profiles in Europe. This deal puts us on a new playing field and opens doors to new opportunities," continued Judson.
Other partners in the Celtic Sea joint venture include:
- Challenger Minerals (Celtic Sea) Limited (CMI): a subsidiary of GlobalSantaFe Corporation;
- Dyas B.V. Exploration and Production, a subsidiary of the privately owned SHV Holdings NV;
- Atlantic Petroleum (Ireland) Limited; and
- Midmar Energy Limited.
The Celtic Sea Licence 2/07 contains the following:
- 'Ardmore' gas discovery;
- 'Helvick' oil field;
- 'Hook Head' oil & gas discovery; and
- 'Dunmore' oil discovery.
"One of the big issues facing oil and gas exploration anywhere in the world is the availability of drilling rigs," said Judson. "But the management group has secured the Petrolia Rig and we expect drilling to commence this summer."
Under the terms of the Agreement, and subject to regulatory approval, Forest Gate will pay 3,600,000 common shares of Forest Gate to Arriba and will enter into Consulting Agreements with Art Bray and Robert Pek, Arriba Principals, so that Arriba relinquishes any residual rights in the Joint-Venture with Providence.
As part of the Joint-Venture Agreement, Forest Gate will pay (euro)586,104 (approximately C$900,000) for outstanding cash calls on work already performed and will cover their 15% Participating Interest share of all future commitments including the summer drilling program.
Forest Gate will continue to maintain its diamond exploration properties in Saskatchewan and Quebec.
"This is a big leap for the company but so was the creation and financing of Blue Note Mining. We have a track record of identifying great deals, financing them and building the team to take the company forward," said Judson.
