Fastnet (AIM: FAST; ESM: FOI) the listed E&P company focussed on exploration activities in Morocco and in the Celtic Sea, is pleased to announce that an independent assessment of eight Exploration Permits comprising the Tendrara Lakbir Petroleum Agreement (the "Tendrara-Lakbir Licence") onshore Morocco has been completed by SLR Consulting ("SLR"). As announced on 29 May 2013, Fastnet entered into an exclusive option agreement with Oil and Gas Investment Funds ("OGIF") to farm into the Tendrara-Lakbir Licence through its wholly owned subsidiary Pathfinder Hydrocarbon Ventures Limited.
The Company recognises that a successful early appraisal of the TE-5 - Lakbir Structure by Fastnet and its partners ONHYM and OGIF has important implications for the strategic planning of Morocco's future gas requirements and the location of new gas-fired power plants. It will enable the validation of the potential Contingent Resources and the potential production profile for any field development scenarios. For this reason early confirmation of the potential scope of the TE-5 - Lakbir Structure to provide indigenous gas to the developing Gas-to-Power options is critical.
Fastnet has completed a series of desk-top studies, detailed below, to address these issues and to provide new data for the Independent Resources Report by SLR, on the basis of which the historical published estimates of resources can be assessed and validated.
A study by a specialist Houston-based NuTech petrophysical team has quantified reservoir properties for the Triassic TAGI Sand that are consistent with a good potential gas flow rate from a gross gas-bearing interval in TE-5 of 82.2 meters. Significantly an independent petrophysical study has also shown that there is no gas-water contact in the TE-5 well.
New seismic depth mapping has shown that the formerly designated TE-5, Lakbir and TE-NE Structures are potentially a single structure with a common gas-water contact in the P50 and P10 Contingent Resources Estimates. This will require verification by a long step-out appraisal well.
Critically this work identifies formation damage as a significant issue in previous drilling and testing on the structure which limited absolute gas flow potential from the TE-5 well. In addition, the study identifies that the nature of the permeability characteristics of the TAGI reservoir interval does not facilitate exploitation by horizontal drilling. Furthermore a significant conclusion of the study is that surface compression in a development scenario will reduce well-head pressures and potentially accelerate recovery of gas.
Preliminary scoping cost estimates for the above Low, Best and High case development scenarios are provided that allow for scoping economics to be performed for each case.
An appraisal well to the TE-5 gas discovery will be required first to validate the potential well deliverability in order to re-calibrate the above potential field production profiles.
A new well design study by Dennis Krahn, Chartered Petroleum Engineer, Summit Upstream, supports the enhanced well potential by designing and drilling a conventional appraisal well using modern technologies to minimise and, preferably, eliminate the formation damage seen in previous drilling operations which impacted previous gas flow rate potential.
Scoping well costs have been determined based on the design and equipment criteria necessary for optimising drilling operations to ensure good deliverability from the TAGI reservoirs.