Longreach Oil & Gas Ltd.
(TSX: V. LOI
, Stock Forum
) said that oil and gas exploration and production company, Cairn Energy PLC, published an operational update today announcing that drilling on the FD II - Alpha-1 exploration well, on the Foum Draa license, offshore Morocco has commenced, using the Cajun Express, a fifth generation semi-submersible drilling unit.
The FD II - Alpha-1 exploration well is located in 1,500 metres of water approximately 120 kilometres offshore Morocco. The well has a planned total depth of 5,500 metres TVDSS and operations are anticipated to take approximately 60 days.
According to the Longreach Oil and Gas press release
, under the terms of the farm-out agreement Cairn acquired a 50% operated interest in the license from Longreach and each of its joint venture partners in exchange for paying the first US$60 million of the exploration well costs.
Longreach retains a 2.5% interest in the Foum Draa license.
In other news, Longreach also provided an update on the mobilization of the Saipem Drillmec Mas 7000, a 2,000HP unit built in 2007 for the drilling of the Koba 1 well in its operated Sidi Moktar, onshore license area. The rig now on location and being assembled for a planned spud date for mid-November.
“The start of this well also kicks-off a wider drilling program for Longreach in the near and medium term,” said Andrew Benitz, CEO. "The program consists of the drilling of two sizable onshore prospects, starting with the imminent Koba 1 well, operated by the company, as well as a further significant offshore well, where again Longreach benefits from a carry on the well".
Longreach is an independent oil and gas company focused on Morocco.
On Monday, Longreach rose 10% and was trading at $0.77 a share. The company had a market cap of $0.77 a share. The company had a market cap of $62.5 million, based on 81.1 million shares outstanding.