Petrofac Increases Investment in UK North Sea Interest

Petrofac's Resources division has increased its interest in Block 9/28a Part B (containing the Crawford Field, recently known as Cragganmore) from 5.58% to 29% and become the operator of the field.

Petrofac Resources has acquired the 55.3% operated interest of Tuscan Energy (Cragganmore) Limited (Tuscan) and agreed to sell, on the same terms and conditions, part of the acquired interest to the other existing partners, Fairfield Acer Limited (Fairfield) and Stratic Energy (UK) Ltd (Stratic). Upon completion, Petrofac will have a 29% interest in the field, Fairfield will have 52% and Stratic 19%.

Following completion of the sale to Fairfield and Stratic, the net consideration paid for the acquisition of Petrofac's additional interest will amount to approximately US$1 million. Petrofac has assumed liability for the contingent payments due under Tuscan's original purchase agreement, comprising a payment should a field development plan be approved and subsequent payments should certain production levels in the field be achieved. Following satisfaction of the conditions precedent relating to the sale to Fairfield and Stratic and completion thereof, Petrofac's share of these contingent payments will amount to up to US$8.5 million.

Ayman Asfari, Petrofac Group Chief Executive, commented: "With these changes to the field ownership and our role as operator, we believe we are in a better position to assess the viability of this previously abandoned asset."

Crawford Field
The Crawford Field, which has been known recently as Cragganmore, was discovered by well 9/28-2 drilled by Hamilton Brothers in 1975 and was subsequently appraised and developed in the late 1980s, producing approximately 4 million barrels of 30-35°API oil via a floating production vessel in the period 1989 to 1990. Field performance fell below expectation and the field was abandoned in the low oil price environment that existed in 1990.

Fairfield
Fairfield is carrying out work on the subsurface on behalf of the joint venture. Using a modern re-processed 3D seismic study, Fairfield currently estimates that the initial oil in place volume is approximately 190 million barrels for the field, of which approximately 140 million barrels (representing the largest target volume for development) are contained within the northern and eastern area of the field. Additional appraisal potential is expected in the untested horizons.

Current plans, which are at an early stage, assume that the field will be developed in phases using modern drilling and completion techniques to reduce risk with wells tied back to one of two nearby production facilities.

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Posted 17/05/06

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