Fastnet Oil & Gas has announced that it has signed a farm out agreement with SK Innovation, an affiliate of SK Group, A Korean conglomerate, in terms of which it will dispose of 50% of its holding (12.5% gross, 9.375% post government carry) in the Foum Assaka licence offshore Morocoo. After the transaction, Fastnet will have a 9.375% net interest the exploration block. SK Innovation will pay $3.2m of back costs and 25% of Fastnets’ costs incurred up to 1 January 2014. It will carry Fastnet for the first well in the block (Eagle-1) capped to $100m. At SK Innovations’s discretion, it will also carry Fastnet for as second exploration well (also capped at $100m).
The announcement of the farm out agreement is positive for Fastnet. Fastnet is carried for the cost of the first exploration well, Eagle-1. The well will be targeting lower cretaceous reservoirs analogous to Jubilee offshore Ghana and will spud in Q1 2014. Kosmos the operator estimated the total volume for the well at 325mmmbls. It will also strengthen the balance sheet ahead of its Morocco onshore drilling.
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