Ithaca announce farm-out of
the Handcross prospect to Euroil
West of Shetlands
Energy Inc. has entered into an agreement with Euroil Exploration Limited,
a wholly owned subsidiary of Edison, to farm-out a 25% interest in UK
licences P1631 and P1832 (blocks 204/14c, 204/18b and 204/19c), which
contain the Handcross prospect. This agreement reduces Ithaca's working
interest in the licences from 70% to 45%. Ithaca retains operatorship
of the licences.
The Edison farm-out is in exchange for a partial carry of Ithaca's share
of the costs of an exploration well on the Handcross prospect. Edison
is a major European energy company, with operations spanning the full
energy supply chain, including oil and gas activities in Europe and Africa.
Handcross is a Palaeocene prospect located in the Judd Basin in the West
of Shetland sector of the UK Continental Shelf. A well is to be drilled
on the prospect using the Stena Carron drillship, with operations anticipated
to commence in late 2013.
The Edison agreement, in combination with the previously announced farm-out
agreement entered into with RWE Dea in April 2013, reduces Ithaca's paying
interest in the Handcross well to 6%. This implies a forecast net well
cost to the Company of $2.5 million, compared to the net cost prior to
the farm-outs of approximately $40 million.
Completion of the transaction with Edison is subject to normal regulatory
and third party consents. Following completion, the Handcross partners
will be Ithaca (45%, operator), Edison (25%), RWE Dea (20%) and Sussex
Energy Limited (10%).
Stellar acted as advisor to Ithaca for the farm-out.