Frontier Exploration Licence 2/14
DRUID, DROMBEG & DIABLO
The Company currently holds a 28% working interest in FEL 2/14, with partners Total (operator, 35%), Cairn (30%) and Sosina (7%). The licence lies in the southern Porcupine Basin, c. 150 km off the west coast and in c. 1,300 m water depth.
FEL 2/14 was originally awarded to the Company (80%) and partner Sosina (20%) as LO 11/9 in October 2011 as part of the 2011 Irish Atlantic Margin Licensing Round. In April 2014, LO 11/9 was converted into FEL 2/14 with the same working interests.
During the initial pre FEL 2/14 authorisation phase (LO 11/9), the joint venture identified two large vertically stacked Paleocene (“Druid”) and Lower Cretaceous (“Drombeg”) fan systems with notable Class II amplitude versus offset (AVO) anomalies primarily from previously acquired 2D seismic data in 2008. The joint venture subsequently agreed to licence part of a multi-client 3D seismic survey over the area. This 3D survey was acquired by Polarcus in the summer of 2014 and was subsequently processed by ION Geophysical in 2014/15.
The Company entered into an exploration collaboration agreement with Schlumberger in respect of the southern Porcupine and Goban Spur Basins. During 2016, the results of the Collaborative Project confirmed the significant resource potential of Druid and Drombeg and a decision was taken to advance a drilling programme.
Following a capital raise in July 2016, the Company accelerated consenting and operational plans to drill an exploration well on FEL 2/14 in summer 2017. Over this same period, the Company operated a data room process for potential new co-venture partners. This farm-out process resulted in the farm-out of equity in FEL 2/14 to Cairn Energy, whereby Cairn took a 30% interest in FEL 2/14 with Cairn being responsible for 45% of the drilling costs of Druid and Drombeg (up to a cap of US$42 million gross well cost), after which the parties paid their costs according to their equity share.
The Company subsequently agreed an option deal with Total whereby Total had the right to take a 35% interest in FEL 2/14, exercisable 60 working days after the completion of drilling, by agreeing to pay an option fee to Providence and Sosina of gross US$27 million.
In July 2017, the 53/6-1 exploration well was commenced drilling operations using the Stena IceMAX drill-ship targeting the Paleocene Druid Reservoir interval and the Lower Cretaceous Drombeg Reservoir interval encountered. As announced in July and September, both reservoirs were encountered within the pre- drill depth prognosis, but both reservoirs were water bearing. Accordingly, in accordance with the pre-drill plan, the 53/6-1 exploration well was plugged and abandoned.
In December 2017, Total exercised their option to farm-in for a 35% working interest and the assumption of operatorship, which has now been approved by the Irish regulatory authorities. Currently, post well studies are ongoing and the JV partners will evaluate these data in the context of the underlying Diablo exploration prospect.
Stena IceMax and USS Nimitz - Comparison
Dimensions Stena IceMAX USS Nimitz
Length 228m 333m
Beam (overall) 42m 77m
Operating Draft 12m 12.5m