Ahead of investor meetings today, Fastnet, the E&P company focused on exploring in Africa and in the Celtic Sea, provides an update on its operations, including its proposed forward work programmes and farm-out activities.
An updated corporate presentation is now available on the Company's website (http://www.fastnetoilandgas.com/investor-relations/presentations/2014.aspx) providing an overview of the Company's recent corporate developments and its asset portfolio.
· * Foum Assaka Offshore project costs net to Fastnet from licence acquisition through prospect portfolio development to the completion of the first exploration well (FA-1) are less than USD $2.75m
· * The Company's in-house post well studies are encouraging for continued evaluation of the hydrocarbon prospectivity of the block
· * The FA-1 and Cairn's FD-1 Foum Draa wells are "range-finding" wells that allow us to better focus on the main reservoir fairways
· * Pre-stack Depth Migration can now be constrained and calibrated by actual well velocities
· * Seismic amplitude "technology" driven definition of exploration prospects pre-drill can now be better calibrated based on actual well data tied to a better understanding of seismic sequence stratigraphy
· * The Early Cretaceous remains an important target in Foum Assaka based on analogies with the Moroccan conjugate margin equivalent of Nova Scotia where this interval is the main focus of attention for the oil majors
· * Management believes all aspects of the petroleum system have now been de-risked with the exception of reservoir thickness and quality which remains the main challenge to address pre-drill Tendrara
· * The pre-stack depth migration reprocessing is expected to be completed in the coming weeks and this will allow us to refine our TE-6 well location and design
· * 3D seismic confirms five potential reservoir targets with potential for substantial in-place oil based on structural size, up to 140 sq. km., and presence of oil logged in legacy wells 48/20-1a and 48/25-1
· * 3D seismic has confirmed potential for reservoir development and has significantly reduced the risk of reservoir compartmentalisation, two legacy issues that have previously held back farmout efforts, which were based only on limited 2D seismic coverage
· * 3D seismic confirms potential for a new frontier exploration basin that is the conjugate margin equivalent of the Flemish Pass and Jeanne d'Arc Basins of Eastern Canada, which hold large hydrocarbon fields and recent discoveries
· * 3D seismic has defined new amplitude-supported potential gas structures and large stratigraphic traps
· * Multiple prospects and leads with potential for multi-TCF in-place gas
· * A two-stage farmout process is underway with increased interest following the highly successfully Celtic Sea Conference held in Dublin in April.
· * Current Cash Balance of USD $22m
· * Fully funded for planned work programmes in Morocco and Ireland
· * Second well carry in Foum Assaka, subject to USD$100m cap, in the event of an appraisal well or, at SK's discretion, a further exploration well
· * Up to USD$20m of past costs in the Celtic Sea potentially recoverable subject to a successful first stage farmout
Commenting, Paul Griffiths, Managing Director of Fastnet, said, "In challenging times for the oil and gas sector we are satisfied that Fastnet is prudently managing its cash resources whilst still creating momentum in developing its portfolio of offshore and onshore assets to a stage where drilling can occur. The FA-1 well represented a high risk - high reward drilling opportunity that was executed with minimal financial risk to Fastnet shareholders through a prudent and successful farmout process. Whilst high risk - high reward drilling opportunities continue to be developed in Foum Assaka following FA-1, the remainder of the portfolio, which contains much lower risk but
equally high reward multiple prospects, continues to be matured ready for drilling. We will pursue our strategy of reducing our financial exposure to drilling through a tried and tested farmout process on the basis that exposure to sustained drilling activity offers the best opportunity to create substantial value through the drill bit."