Update on Peruvian discussions

RNS Number : 6556S

Clontarf Energy PLC

04 December 2012

 



4 December 2012

Clontarf Energy plc

("Clontarf" or the "Company")

Update on Peruvian discussions

Memorandum of Understanding signed on both Blocks 183 and 188

Clontarf Energy plc (AIM: CLON) today reports progress on its partnership discussions with several interested parties on its 100 per cent owned Blocks 183 and 188 in Peru.  Block 183 in central Peru covers 396,826 hectares.  Block 188 in southern Peru covers 595,809 hectares and is located less than 100 kilometres north-east of the giant Camisea gas field.

Clontarf has entered into a Memorandum of Understanding (the "MOU") with an Italian group to co-operate on jointly exploring and developing each of Peruvian Blocks 183 and 188.  This group, in turn, is in advanced discussions with a European investment banking group for it to participate as a partner in Blocks 183 and 188.

Pursuant to the MOU a timetable has been established to reach the final required Farm-out Agreement.  The MOU terms have addressed the key issues in such agreements including funding of the exploration programme: it is proposed that any farm-out agreement will include the drilling of two wells in Block 188 and one well in Block 183.  Clontarf intends to retain a significant minority position on both licence blocks and also to recover historical expenditures from the parties farming in.

The Directors believe that Block 183 has important natural gas-condensate prospective reserves. As such (and separate from the MOU referred to above), Clontarf has focused on gas off-take arrangements in relation to that block. 

The Company is in talks with a European power generation company and a German industrial group for the construction of a 167 MW plant to serve the nearby area, which has rapidly developing agribusiness and tourist industries. Power prices and dispatch for modern gas-fired plants are more favourable than the current, inefficient fuel-oil fired capacity that is being dispatched in the area.

Clontarf is also negotiating a memorandum of understanding with a leading gas distribution group to handle off-take of natural gas from Block 183 for industrial, commercial and residential customers, as well as compressed natural gas for vehicles and other uses, including producing mines.  In all cases Clontarf will seek to retain a significant minority equity position.

David Horgan, Managing Director commented:

"While there can be no certainty regarding the outcome of our ongoing discussions we are pleased to have signed the MOUs, and we feel that the pieces of the jigsaw are coming into place: Recent discoveries by Petrobras, Repsol and Petrominerales close to Block 188 have refocused oil industry attention on this area's prospectivity. "At the same time, fast Peruvian economic growth has enhanced the appeal of our integrated gas and power generation project in Block 183.  Leading European partners may participate in the project.

"For the first time, Clontarf plans to retain an equity position in downstream gas sales, so as to capture more value from the anticipatedenergy demand growth nearby."

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This statement has been approved by senior geological consultant to the Company Jorge Flores, a University of Oklahoma qualified petroleum engineer.

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For further information please visit http://clontarfenergy.com or contact:

Clontarf Energy plc

John Teeling, Chairman                                                                                        [phone]

David Horgan, Managing Director

James Finn, Finance Director

Nominated Adviser and Joint Broker

Shore Capital

Pascal Keane/Toby Gibbs, Corporate Finance                                            [phone]

Jerry Keen, Corporate Broking

Joint Broker

Optiva Securities Limited

Jeremy King                                                                                                              [phone]

Jason Robertson                                                                                                      [phone]

Public Relations

Blythe Weigh Communications                                                                        [phone]

Tim Blythe                                                                                                                  [phone]

Robert Kellner                                                                                                          [phone]

Pembroke Communications

David O'Siochain                                                                                                      [phone]

 

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