Oil and gas group Premier Oil (LON:PMO) has signed an agreement with Antrim Energy Inc (LON:AEY) that will see the two sides study options for the Fyne Area in the UK Central North Sea. Under the terms of the deal, Premier will have the option to acquire a 39.9% interest in Block 21/28a containing the Fyne field in return for paying up to US$50m towards the pre-development and development costs of the Fyne field which includes an immediate US$2m payment and may include the drilling of an appraisal well on the Eastern part of the Fyne structure. Shares in Premier fell slightly to £1,673 during early trading while share in Antrim were up by 25.6% to 78.5p.

Antrim owns a 75% working interest in Block 21/28a, and a 100% working interest in the adjacent Blocks 21/28b, 21/29c, 21/24b and 21/24c (the Greater Fyne Area). The agreement also provides Premier with the option to participate at a working interest of up to 50% alongside Antrim in a planned drilling programme scheduled to start as early as the second quarter of 2011 in the Greater Fyne Area. Block 21/28a was assigned proved plus probable reserves of 23.3 million barrels of oil by independent engineering consultants McDaniel & Associates Consultants Ltd. in a 31 December 2009 reserve report. Any licence assignment under this agreement will be subject to the usual UK government approvals.

Antrim drilled two wells and three sidetracks in a 2008 appraisal programme of the Fyne Field. Well 21/28a-10Z was tested at rates up to 4,000 barrels of oil per day. Wells 21/28a-10Z and 21/28a-9Y were cased and are available for use in the development of the Fyne Field. Initial drilling of the Dandy and Area 4 fields, also on the Fyne Licence, was completed by previous operators of Block 21/28a. The Fyne Field lies immediately west - southwest of the Guillemot group of oil fields, which have produced in excess of 70 MMBO to date. Fyne is also approximately 10 km east of the recently announced Blakeney oil discovery in Block 21/27b and 35 km north of the recently announced Catcher oil discovery in Block 28/9, both of which have reservoirs of comparable age to those in the Greater Fyne Area.

Simon Lockett,…

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