AIM-listed Fastnet Oil & Gas has agreed an exclusive option with PSE Kinsale Energy to farm into the Deep Kinsale Prospect beneath the oil producing Kinsale Head gas field.

In an update issued on Thursday, Fastnet reported that a minimum of 500 square kilometres of three dimensional seismic was to be acquired in 2013.

The company reported that it would have the potential to drill in 2014 to earn a 60% working interest which could reduce to a minimum of 40% if Kinsale Energy chose to exercise certain back-in rights.

Under the terms of the agreement, the farm-in well could be drilled to a provisional depth of 8,000 feet subsea.

Upon completion and, if warranted, testing of the farm-in well is expected to earn a 60% working interest in the Deep Kinsale Sub-Area by funding 100% of all drilling and testing costs.

Cathal Friel, Chairman of Fastnet, said: "We are delighted to have added an exclusive option to farm into and potentially drill the Deep Kinsale Prospect in 2014. It represents an attractive addition to our Irish portfolio as we have long held a belief that Deep Kinsale offers the potential to yield up another significant hydrocarbon discovery offshore Ireland.

"This belief has been further strengthened by the successful appraisal of Barryroe in 2012, which is geologically analogous to Deep Kinsale. We greatly look forward to working in close cooperation with our colleagues at Kinsale Energy, as we collectively seek to de-risk the prospect for drilling."

Shares in Fastnet Oil & Gas rose 1.98% to 25.75p at 11:50 on Thursday.

MF

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