Option Agreement

RNS Number : 0205W

Lansdowne Oil & Gas plc

05 June 2008

 

5 June 2008

Lansdowne Oil & Gas plc

('Lansdowne' or the 'Company')

Lansdowne grants Farm-in Option to Island over the Prospective Old Head Gas Trend in Licence 4/07

Highlights:

• Option agreement entered into with Island Expro Limited, a subsidiary undertaking of Island Oil and Gas plc ('Island')

• Lansdowne has granted Island an option until 31 December 2008 to farm-in to an area of Standard Exploration Licence 4/07 in the Celtic Sea, offshore Ireland

• Under the terms of the option:

Island will acquire seismic survey over the area and the right to carry out the drilling and testing of a farm-in well

If exercised, drilling of the well is expected to commence before 31 July 2010

Island would become the operator and acquire a 58.34% interest, with Lansdowne retaining a 41.66% interest

Farm-in benefits from synergies created by development of existing infrastructure at Old Head 

Lansdowne, the Dublin based oil and gas company focused on exploration and appraisal opportunities offshore Ireland, is pleased to announce that it has executed an Option Agreement (the 'Option') with Island to farm out an area (the 'Area') of Standard Exploration Licence 4/07, covering part blocks 49/11(p), 49/12(p), 49/13(p), 49/17(p) and 49/18(p) in the Celtic Sea offshore Ireland. The Option, if exercised, would be subject to the approval of the Minister for Communications, Energy and Natural Resources. 

Under the terms of the Option Island will acquire a seismic survey of approximately 100 km of 2D data over the Area and will have the right to carry out the drilling and testing of a farm-in well (the 'Well') in the Area. The Option extends to the 31 December 2008 and, if exercised, the Well is expected to commence before 31 July 2010, depending on rig availability.

The Well, subject to the exercise of the Option, is expected to be drilled and will test potentially the same reservoirs that are gas-bearing in the 49/23-1, 49/23-2 and 49/23-2z wells drilled by Island in the Old Head gas field immediately to the south of the Area. 

Upon exercise of the Option Island will acquire a 58.34% equity interest in the Option Area and become the operator and Lansdowne will retain a 41.66% equity interest.

Following comprehensive seismic, geological and reservoir engineering studies in the area of the Old Head gas field, Island now believes that there is additional potential for low risk gas prospects along the 'Old Head Trend' in an area of the Celtic Sea that was formerly under-explored until the Old Head gas discovery was made by Island in 2006.

Steve Boldy, CEO of Lansdowne, commented:

'    We are pleased to conclude this agreement with Island which will allow the evaluation of the Old Head Trend to proceed in a co-operative and timely manner, commencing with the acquisition of new seismic data, currently underway. We look forward to working with Island with a view to early development of the gas potential in the Old Head Trend'.

This resource update has been reviewed and approved by Steve Boldy, Chief Executive of Lansdowne. Steve Boldy is a geology graduate with a Ph.D from Trinity College Dublin and is a member of the Petroleum Exploration Society of Great Britain. He has 26 years experience in the oil and gas exploration sector and is a qualified person as defined in the guidance note for Mining, Oil & Gas Companies, March 2006 of the London Stock Exchange.

Enquiries:

Lansdowne Oil & Gas plc
Steve Boldy, Chief Executive	00 353 1 6373934
John East & Partners Limited
David Worlidge	020 7628 2200

 

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