Malta’s hunt for elusive oil prospects in its territorial waters may soon yield results, with Mediterranean Oil and Gas having said on Friday that it intends to begin drilling off Malta in Area 4 by the end of the year.
The company’s chief executive said that it believes there to be 260 million stock barrels in the area’s four Eocene/Palaeocene prospects and a further 27 million if the Tarxien Prospect proves to be a 'reef' model; these figures were extracted from an independent review of data.
Chief executive Dr Bill Higgs said on Friday, "Importantly, this independent review of the Area 4 Prospects by ERC Equipoise confirms the technical evaluation of the exploration potential carried out by the Company.
“Moreover, a detailed economic evaluation confirms that, if proven by drilling, the Prospects identified at the Eocene/Palaeocene can be economically viable on a stand-alone basis. We look forward to testing the first of these Prospects with the drill bit by the end of 2013, pending completion of the farm-out agreement with Genel Energy announced in August.
“We are continuing to work on maturing additional Leads and Plays that could provide considerable upside potential should an active hydrocarbon system be demonstrated by the initial wells.”
On Friday, the company announced the results of an independent evaluation of Malta Offshore Area 4 currently owned by MOG through its wholly owned subsidiary, Phoenicia Energy Company Limited (PECL).
PECL entered into a farm-out agreement with Genel Energy Plc in August 2012 to sell 75 per cent of PECL's interest in Area 4. The farm out, the company aid, is conditional on approval by the Maltese authorities, together with the grant of a minimum one-year extension of the first exploration period of the Area 4 Production Sharing Contract.
Following the acquisition of 1,012 square kilometres of long offset 3D seismic data on Block 7 of Area 4, ERC Equipoise Ltd (ERCE) - an independent consultancy specialising in geosciences evaluation, engineering and economic assessments - has carried out an independent review of the undiscovered hydrocarbons initially in place, prospective resources and the geological chance of success associated with Area 4.
The review was carried out using the March 2007 SPE/WPC Petroleum Resources Management System (PRMS) as the standard for classification and reporting.
The company said that the evaluation of the identified traps highlights four structures at Eocene/Palaeocene level that exhibit sufficient technical maturity to confirm prospect status under the PRMS. ERCE has carried out an independent estimation of Prospective Resources and geological chance of success (COS) for these Prospects, which MOG has named as: Haġar Qim, Tarxien, Skorba and Dalam.
The reservoir analogue used is that of the Tunisian El Garia Formation. Based on seismic mapping character, an alternative, higher risk, 'reef' model is also proposed for the Tarxien Prospect. ERCE has also estimated Prospective Resources and COS for this potential outcome.
Additional structures, identified by MOG at Eocene/Palaeocene level and towards the top of the Cretaceous, are classified by ERCE under the PRMS as Leads, as they are currently either high risk, or warrant further technical work in order to mature to Prospect status.
While these Leads have not been audited by ERCE, they are assessed by MOG to contain an additional one billion barrels of Prospective Resources.
In addition, analysis to define the prospect of a potentially new deeper Jurassic (or older) layer, that the new 2011 3D seismic data have highlighted, has commenced, but as yet no Leads or Prospects have been matured, but the company said that this can be considered as a significant potential upside.