Fastnet £2.53 Unrisked/ Core NAV £0.42 Risked
Including onshore Moroccan gas play in our NAV
We have added the potential Merada onshore licence to our NAV following the
company?s decision to exercise, with Pan Maghreb Oil & Gas Ltd (formerly
Pathfinder Energy Maghreb Plc), an existing option to participate in the Merada
Licence Application. Award and ratification of the
licence by the local authorities .
The licence area covers over 7,000 km2
with the primary target being biogenic gas
in the Tertiary, requiring shallow and inexpensive drilling – provisionally estimated
at a cost of $1.5m net. Current resource estimates prepared by SLR Consulting
indicate gross recoverable of 540 BCF (64mmboe net to Fastnet). The Maghreb
pipeline (see below) crosses the Merada permit area, offering access to the
European gas market in Spain and Portugal. Merada contributes 12p to our NAV
on a risked basis.
Celtic Sea Licence Options with Proven Hydrocarbon Systems
Fastnet has recently been awarded an additional licensing option and has farmed
into another recently awarded licensing option in the Celtic Sea – Block 49/13 and
Shanagarry, respectively. Both licence areas were drilled previously and
encountered working hydrocarbon systems but were not developed due to
economic conditions at the time, owing largely to low prevailing gas or oil prices in
the 1970s and 80s. Competent Persons Reports (CPRs) covering both assets are
expected over the next three months and as such, potential value is not yet
reflected in our NAV
Risked NAV Distribution (£p)
Offshore Morocco
Onshore Morocco
Ireland
Addition of “Big Oil” expertise to the Board
Fastnet recently brought Carol Law, former exploration geologist with Anadarko Petroleum, onto its
Board as Executive Director. We view this is as major positive for Fastnet, given Law?s successful
exploration track record (including major finds in Mozambique, Ghana and Brazil) and her experience
negotiating favourable farm-down agreements with oil Majors. We anticipate some farm-down activity for Fastnet?s offshore Ireland and offshore Morocco acreage, given its relatively large equity
positions in both regions.
A number of catalysts over the next 12 months
In the near-term, we await CPR reports for Licencing Option 49/13 and Shanagarry in the Celtic Sea to
ascertain the size of each opportunity, which should be released in the coming months. In Morocco, the
company anticipates the award of the Merada onshore licence . Attention will then shift to the
drill bit in the second half of , with a provisional well onshore Morocco penciled in (contingent
upon timely Merada licence approval), and the offshore well with partner Kosmos. Our new price target of 42p (from 40p) equates to our risked NAV, which now reflects the
addition of the Merada Licence .
Fastnet Oil & Gas Core NAV £0.42 Risked
£2.53 Unrisked
Country Block Prospect Gas Total Company Net Recovery Chance of Risked
BCF MMBOE interest MMBOE Factor Success MMBOE $/bbl $min £ m p/sh
Exploration
Morocco Foum Assaka A6 330 18.75% 6 2 20% 30% 3.7 7.6 28.2 18.1 6.6
B12 230 18.75% 4 3 20% 30% 2.6 7.6 19.7 12.6 4.6
A1 Canyon 175 18.75% 3 3 20% 30% 2.0 7.6 15.0 9.6 3.5
A1 N 100 18.75% 1 9 20% 30% 1.1 7.6 8.6 5.5 2.0
A8 5 0 18.75% 9 20% 30% 0.6 7.6 4.3 2.7 1.0
A9 100 18.75% 1 9 20% 30% 1.1 7.6 8.6 5.5 2.0
Merada Onshore Merada Permit 1,021 170 37.50% 6 4 53% 30% 10.1 5.0 50.7 32.5 11.9
Ireland Mizzen Basin Wealden Gas 2,075 346 100% 346 5 % 7.0% 1.3 5.0 6.3 4.0 1.5
Wealden Oil 154 100% 154 5 % 7.0% 0.6 5.0 2.8 1.8 0.7
Triassic Gas 3,108 518 100% 518 5 % 7.0% 1.9 5.0 9.4 6.0 2.2
Molly Malone Basin North Prospect - Gas 1,264 211 100% 211 5 % 7.0% 0.8 5.0 3.8 2.5 0.9
North Prospect - Oil 570 100% 570 5 % 7.0% 2.1 5.0 10.4 6.6 2.4
South Prospect - Gas 690 115 100% 115 5 % 7.0% 0.4 5.0 2.1 1.3 0.5
South Prospect - Oil 500 100% 500 5 % 7.0% 1.8 5.0 9.1 5.8 2.1
Total exploration 3,569 2,662 3 0 8 6 179 115 4 2
Cash 3 6 2 3 8
Exploration & Work Programme -34 -22 -8
3,569 2,662 3 0 179 115 4 2
Risked NPV
Fastnet Oil & Gas catalyst timeline
Time Country Block Catalyst
Dec/Jan Ireland Shanagarry & 49/13 CPR Reports Released
Q1 2013 Morocco Merada Execution and Award of Licence
Q2 2013 Ireland Mizzen 3D Seismic Data Acquisition
Q3 2013 Morocco Merada Spud Onshore Well
Q4 2013 Morocco Foum Assaka Spud Offshore Well
Source: Company presentations and Dolmen estimates |
