Clontarf Energy has signed exploration and development contracts on two blocks in Peru.

The licences which were awarded in the October 2010 tender round, were approved by Supreme Decree on 26 July and were signed at a ceremony in Lima yesterday, 28 September, by the President of the State Oil Company, Perupetro.

Block 188 consists of 595,809 hectares of prospective ground close to the world-class Camisea producing field which is estimated to contain 16 trillion cubic feet of gas and 400 million barrels of condensate. The Directors believe that Block 188 has Camisea-type potential and is also prospective for medium-size shallower fields:

• 13,400km of 2d seismic data and 50 wells' log data are available for the region • There is good but old seismic coverage on the block as well as data on three wells drilled very close to the block • There are three main producing reservoirs in the wider area and an undeveloped oil discovery at neighbouring La Colpa

Block 183 consists of 396,826 hectares in the Marañon Basin, which has produced since the 1940s. The block is located beside existing production. The Directors believe that any future discovery on this block could connect to the existing gas and oil/condensate transport infrastructure.

• Two oil fields and one gas field neighbour Block 183 • Extensive historic seismic data is available: 1,700km of 2d seismic data • Seismic data has been recently re-processed and is of good quality • There are two main source rocks: Triassic-Jurassic & Cretaceous • Leads and prospects have already been identified from reprocessing seismic, including 4-way closures in the Yurimaguas Anticline • The Directors plan to complete 1st phase Geology & Geophysics work by the end of 2012

Peruvian fiscal terms are attractive, with a combination of royalty and taxes. Work programmes are reasonable and bonding requirements acceptable at $135,000 per block. The Peruvian Government take is proportional to overall field profitability: the total effective state take is approximately 50% of revenue.

David Horgan, Managing Director, commented: "Yesterday's signature marks a key step in Clontarf Energy's development. Clontarf was the only junior company to qualify for the October 2010 Peruvian Bid Round, alongside the world's leading majors and National Oil Companies.

Tags: Clontarf Energy