Falklands : Falklands: FOGL NAMES FARM-OUT PARTNER
Submitted by Falkland Islands News Network (Juanita Brock) 26.06.2012 (Article Archived on 10.07.2012)
On 20 March 2012, the Board of FOGL announced that it had granted an option to enter into a Farm Out Agreement (FOA) to an industry counterparty. While talks were going on FOGL chose not to say who that partner was but today FOGL announced that the counterparty was Edison which was unable to conclude the farm out agreement at that time as it was undertaking a corporate reorganisation which led to EDF becoming a controlling shareholder.
FOGL NAMES FARM-OUT PARTNER
By J. Brock (FINN)
On 20 March 2012, the Board of FOGL announced that it had granted an option to enter into a Farm Out Agreement (FOA) to an industry counterparty. While talks were going on FOGL chose not to say who that partner was but today FOGL announced that the counterparty was Edison which was unable to conclude the farm out agreement at that time as it was undertaking a corporate reorganisation which led to EDF becoming a controlling shareholder.
The farm out considerably strengthens FOGL's financial position. In the event that the two exploration wells are drilled within budget it is estimated that on completion of the wells the Company's cash balances will not be less than $100 million and they will be available to fund additional exploration work. This may include further drilling and/or the acquisition of 3D seismic.
The farm out to Edison has been approved by the Falkland Islands Government.
Edison is a long established international exploration and production company currently producing 48,000 barrels oil equivalent (boe) per day. Edison has approximately 360 million boe of reserves from over 80 licences spanning countries such as Italy, Egypt, Norway, Croatia, Algeria and the UK. Edison has experience in a wide variety of operating environments and has participated in a number of deep-water ventures elsewhere, including offshore Egypt. Edison is now controlled by EDF, the world's leading electricity company, who are looking to use Edison as a vehicle to expand its position in upstream oil and gas projects.
"We are delighted to have agreed favourable farm out terms with Edison. Edison is an experienced international exploration and production company, now owned by a major European energy company. The discussions we have held with Edison over the past few months augur well for a successful relationship. This farmout provides further industry validation of the potential of our licences and gives us greater financial flexibility for our future exploration programme." said Tim Bushell, Chief Executive of FOGL.
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