Fastnet Oil & Gas (LON:FAST) has taken a step closer to de-risking its potentially exciting assets in the Mizzen basin in the Celtic Sea.
It has hired leading services firm WesternGeco Seismic, part of Schlumberger, to re-process existing 2D seismic data as well as carrying out other technical geophysical work.
Fastnet believes the Mizzen basin, which is located near the high profile Barryroe field, could hosts more than 2 billion barrels of oil. However the project remains at an early stage and more work is required to firm up the prospective estimate.
Dublin-based broker Davy this morning explained that the poor quality of the existing data is one of the main risks.
As such the planned re-processing work could prove to be an important step in this de-risking process. Fastnet currently believe this work will be completed in the early part of next year.
Chairman Cathal Friel said that WesternGeco is one of the most respected companies in this area.
“Through their work we hope to continue de-risking the licence area in order to mature it toward exploratory drilling,” he said.
The Mizzen basin is currently being assessed by Fastnet under a licence option and subject to positive findings in the initial exploration phase the company will be able to upgrade the option into a full exploration licence.
“[Today’s] news demonstrates Fastnet's attempts to progress its Irish portfolio and the preparation required to drill out the best targets when the licence option is converted to a full exploration licence which, subject to the results of the study, is something we expect will take place,” Davy analyst Job Langbroek said in a note.
In addition to Mizzen, Fastnet also has another exploration project in the Celtic Sea. In the Molly Malone basin the company believes it may have as much as 12.5 billion barrels of oil in place, though like Mizzen these prospects are also at an early stage and are high risk.
Investor attention on the Celtic Sea is high following Providence Resources (LON:PVR) breakthrough at Barryroe.
Providence, alongside partner Lansdowne Oil & Gas (LON:LOGP), successfully completed appraisal work this year which has brought Barryroe to the cusp of development as Ireland’s first commercial oil field.
The field is thought to contain nearly 2 billion barrels of oil in place, which includes deeper untested reservoirs.
A potential development of the main Barryroe reservoirs could produce 100,000 barrels of oil per day, ultimately recovering around 280 million barrels from a 1 billion barrel in-place resource over a 25 year lifespan.