Wednesday, July 25, 2012

Petrel Resources plc [PET] - Irish offshore exploration presents new potential prospects 

25 July 2012

Petrel Resources plc
(“Petrel” or the “Company”)

Irish offshore exploration presents new potential prospects 

Petrel Resources (AIM: PET) today announces its operational update for its Atlantic Margin licence options work conducted since late 2011.


• Several new potential prospects identified
• First Phase targeted for completion by end 2012
• Significant market interest in Irish offshore exploration 

David Horgan, Managing Director of Petrel Resources plc, commented:

“The oil world has been transformed in recent years: despite fluctuations, the oil price remains high. Ireland’s fiscal terms are competitive and legal title is secure. Technology has leaped ahead on several fronts, reducing costs and risks. The combination of three dimensional seismic surveys and directional drilling allow explorers to map and drain complex reservoirs. 

“The planned development of the 1981 Ballyroe discovery, after a dramatic increase in reserves, shows what is now possible. 

“We believe that the Irish offshore will be increasingly attractive to investors.”

Full Update

• Petrel was awarded (in October 2011) licensing options over two sets of blocks in the Atlantic Porcupine Basin.
• The blocks, on the eastern margin of the basin, are Blocks 35/23, 35/24 and the western half of 35/25, and Blocks 45/6, 45/11 and 45/16. These cover about 1,400 km2 in total.
• Historically, Porcupine Basin exploration concentrated on Jurassic targets resembling those of the northern North Sea province. Lack of success led to reduced interest, with no wells drilled in the basin over the last decade. Success in different categories of reservoirs elsewhere, as in the West African and South American offshore, has forced a general re-think, and led to a resurgence of interest in similar potential targets in the Porcupine Basin.
• In making the bid the Company had relied on its large archive of seismic data and reports, supported by the acquisition of a selection of additional seismic lines. This substantial database has enabled this extensive work to proceed quickly on a modest budget of one million euro over two years.
• Since the award, Petrel has purchased additional substantial coverage of seismic lines and undertaken a re-interpretation of the full integrated data set across both sets of blocks. The data were carefully calibrated against the relevant well logs. This phase of the project was completed in June 2012.
• A second phase of interpretation is now underway to detail and appraise the potential prospects identified in the first phase of work. This will include the acoustic inversion of selected seismic lines to assess the quality of the targeted reservoir sections. Additional seismic lines may be purchased if crucial to the interpretation. This phase of the work is scheduled to be completed by end September 2012.
• A separate seismic project is underway to detail the depositional facies and character of the identified sand bodies. 
• All the relevant well data in the region has been acquired and a full petrophysical appraisal made of 17 wells. Following the upcoming inversion work, this will improve control of the seismic data and potential prospects.
• A separate study is being initiated and will focus on the sedimentary provenance of the reservoir successions. This will involve initial petrographic analysis, followed up with the application of the Pb-in-feldspar technique to determine the provenance of first cycle material in the detrital components of the succession. This is important in the Porcupine Basin where sediment input can be along the axis of the basin or from the basin margins.
• Our objective is to develop prospects that will attract in large partners, with a view to an early seismic campaign followed by exploration wells.

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