TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin Islands, May 31 /CNW/ - Orca Exploration Group Inc. ("Orca" or the "Company") announces that it has signed an agreement with Petroceltic International plc ("Petroceltic") to farm in on Petroceltic's Central Adriatic B.R268.RG Permit offshore Italy.
The farm-in commits Orca to fund 30% of the Elsa-2 appraisal well up to a maximum of US$11.5 million to earn a 15% working interest in the permit. Thereafter, Orca will fund all future costs relating to the well and the permit in proportion to its participating interest. Drilling is expected to commence in the fourth quarter of 2010. Orca has also agreed to pay Petroceltic fifteen per cent (15%) of the back costs in relation to the well up to a maximum of US$0.5 million.
"Orca is delighted to be partnering with Petroceltic in drilling the Elsa-2 well. This is a great fit for us. We see this as a low risk opportunity in a proven hydrocarbon basin. Elsa-2 is going to be drilled in a stable jurisdiction, in an exploration area that has a lot of upside potential," said David Lyons, Orca Exploration Chairman and CEO. "We see this farm-in as similar to PanOcean Energy's entry into Gabon. There we moved into an area that had lost the attention of the major players and we worked with others who had a similar vision to develop a substantial reserve."
The Elsa field was discovered in 1992 by AGIP with the drilling of the Elsa-1 well which encountered an oil column of 65 meters in the Lower Cretaceous Maiolica Formation at a depth of approximately 4,500 meters. The low risk Elsa-2 appraisal well has the primary objective of confirming the commercial production potential of the reservoir when flow tested. Positive results from Elsa-2 will be followed by a 3D seismic survey over the field.
In addition to interest earned in the drilling of Elsa-2 Orca's farm-in agreement with Petroceltic provides an opportunity for Orca to participate on a ground floor basis in an additional 11 Petroceltic held exploration blocks in the Central Adriatic in which Orca could also earn a 15% working interest. Several commercial oil discoveries are in close proximity to the Elsa permit including the Rospo Mare and Ombrina Mare fields on the platform and the Miglianico field on the platform margin. A further acquisition of seismic is planned to evaluate more fully the potential of these exploration permits.
Petroceltic International plc is a leading upstream oil and gas exploration and production company, focused on the Mediterranean and North African areas, and listed on the London Stock Exchange's AIM Market and the Irish Stock Exchange's IEX Market.
Orca Exploration is an international public company engaged in hydrocarbon exploration, development and supply of natural gas in Tanzania and the development of high potential oil exploration and production opportunities in Europe, the Middle East and Africa. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca Exploration's control, including the impact of general economic conditions in the areas in which Orca Exploration operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with oil and gas operations, therefore Orca Exploration's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Orca Exploration will derive therefrom.
SOURCE Orca Exploration Group Inc.
For further information: For further information: W. David Lyons, Chairman and CEO, +44-7717-100-200, firstname.lastname@example.org; Nigel A. Friend, CFO, +255 (0)22 2138737, email@example.com