Leni Gas and Oil plc has bought a 20 per cent interest in an oil exploration study programme (ESA) over blocks 4,5,6, and 7 of Area 4 in the south of Malta in a $5 million deal with Mediterranean Oil and Gas (MOG).
Under the terms of the deal, which is subject to Malta government approval, LGO will be funding 2D and 3D seismic surveys and should there be progress towards drilling a well, it will be able to raise its interest in a production sharing contract to 50 per cent by funding 80 per cent of the cost of the first well.
MOG had commissioned a number of detailed technical studies including reinterpretation of seismic data over the Maltese acreage. In May last year it announced a best estimate STOIIP (stock tank oil initially in place) total of 5,745 million barrels of oil and high estimates STOIIP of 14,432 million barrels of oil.
The best estimates were described as being P50, meaning there is a 50 per cent chance of recovering that amount of oil, while the high estimates were P10, meaning there is a 10 per cent probability that the quantities actually recovered will equal or exceed the estimate.
The acreage covers an area of over 5,000 square kilometres between Malta and Libya in an area which LGO said is within the internationally recognised border of Malta. The sea is some 400m deep.
The Exploration Study Agreement between MOG and the Maltese government was signed in March 2005 and extended on March 7 this year. Some studies of Area 4 were made in the past by JNOC, Amoco, Shell and Nimir, but LGO said the acreage, is still under-explored.
London-based Leni Gas and Oil is a newly incorporated company which intends to be an active investor in Africa, North America, Australia, Asia and Western Europe.
"We look forward to working with the experienced management team of Mediterranean Oil and Gas to develop this highly prospective asset into near term production" David Lenigas, chairman of LGO said in a statement
Under the terms of the deal, which is subject to Malta government approval, LGO will be funding 2D and 3D seismic surveys and should there be progress towards drilling a well, it will be able to raise its interest in a production sharing contract to 50 per cent by funding 80 per cent of the cost of the first well.
MOG had commissioned a number of detailed technical studies including reinterpretation of seismic data over the Maltese acreage. In May last year it announced a best estimate STOIIP (stock tank oil initially in place) total of 5,745 million barrels of oil and high estimates STOIIP of 14,432 million barrels of oil.
The best estimates were described as being P50, meaning there is a 50 per cent chance of recovering that amount of oil, while the high estimates were P10, meaning there is a 10 per cent probability that the quantities actually recovered will equal or exceed the estimate.
The acreage covers an area of over 5,000 square kilometres between Malta and Libya in an area which LGO said is within the internationally recognised border of Malta. The sea is some 400m deep.
The Exploration Study Agreement between MOG and the Maltese government was signed in March 2005 and extended on March 7 this year. Some studies of Area 4 were made in the past by JNOC, Amoco, Shell and Nimir, but LGO said the acreage, is still under-explored.
London-based Leni Gas and Oil is a newly incorporated company which intends to be an active investor in Africa, North America, Australia, Asia and Western Europe.
"We look forward to working with the experienced management team of Mediterranean Oil and Gas to develop this highly prospective asset into near term production" David Lenigas, chairman of LGO said in a statement