Company Update

RNS Number : 9100S

Argos Resources Ltd

29 November 2011

 



 29 November 2011

ARGOS RESOURCES LIMITED

("Argos" or "the Company")

Company Updates Plans

Argos Resources Limited (AIM: ARG.L), the Falkland Islands based exploration company focused on the North Falkland Basin, today reports that it has decided not to participate in the current drilling campaign in the area with the Ocean Guardian rig, which is now likely to end in December 2011. The weak capital markets combined with the planned departure of the rig will not allow a meaningful multi-well exploration drilling programme within the Company's licence area to be undertaken at the present time.

Commenting on this, Ian Thomson, Chairman of Argos, said:

"We have identified a large inventory of attractive prospects from excellent quality 3D seismic data acquired earlier this year. This inventory justifies several exploration wells being drilled to test adequately the potential of our acreage. However, the current weak state of the capital markets and the restricted availability of the Ocean Guardian rig will not allow a meaningful drilling programme to be undertaken. We have rejected the option of drilling only one well at this time as we remain convinced of the value of the acreage and the merits of a more extensive drilling programme.

After taking appropriate advice from a range of sources in the capital markets the Board has concluded that in current market circumstances funding for two or more wells would not be available even on highly dilutive terms for existing shareholders.

We have held preliminary discussions with a number of possible farm-in partners. Farm-in arrangements which could have been finalised within the timeframe for availability of the Ocean Guardian involved a single well only, and were not therefore acceptable.

We still have additional work to do to complete the interpretation of the 3D data and prepare the licence for farm-out. This work will be completed in the first half of 2012 and the option of an industry partner will then be pursued. We will continue to consider other options to fund drilling costs.

We believe that we can create more value in the future by ensuring that an adequately sized drilling programme can be financed and implemented before exploration drilling commences on our licence. We remain convinced of the value of the acreage and the merits of an extensive drilling programme."

For further information:

Argos Resources Ltd ([phone])

www.argosresources.com 

Ian Thomson, Chairman

John Hogan, Managing Director

Evolution Securities Limited ([phone])

Jeremy Ellis

Matthew Tyler

Neil Elliot

Adam James

Citigate Dewe Rogerson ([phone])

Martin Jackson

Kate Lehane

Notes to Editors 

Argos is an oil and gas exploration company based in the Falkland Islands. The principal asset of the Company is a 100 per cent. interest in Production Licence PL001, covering approximately 1,126km² in the North Falkland Basin (the "Licence Area").  The Licence Area adjoins licence PL032 where the Sea Lion oil discovery was made by Rockhopper Exploration plc, who are undertaking an extensive appraisal drilling campaign on that discovery.

The Company has a strong and experienced management team with significant experience in both the oil and gas industry and the Falkland Islands. The Company has completed a 3D seismic programme and issued a Competent Person's Report in October 2011 describing 28 prospects with a combined Best Estimate of unrisked prospective recoverable resource in excess of 2.1billion barrels, with an upside in excess of 7.3 billion barrels.

This statement has been approved by John Hogan, Managing Director of Argos Resources and a qualified geologist with over 35 years experience in the petroleum industry.

 

END

 

 

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