Mediterranean Oil & Gas and Dominion Petroleum to decide on Maltese farm out deal

Back in June, MOG signed a agreement to farm out a 75 percent operated working interest in a production sharing contract for four blocks offshore Malta to dominion.

The farm out deal was conditional on the US$50 million fundraiser by Dominion, which was rejected by the company’s shareholders yesterday.

The proposed placing secured 63.5 percent of the vote at yesterday’s general meeting, falling just short of the 66 percent threshold needed to complete the funding.

Dominion said at that time that it would proceed with farm out discussions as planned, adding that it had the funds to cover its existing obligations.

The farm out deal covered Blocks 4, 5, 6 and 7 of Area 4 offshore Malta, situated to the north of Libya.
Independent assessments suggest prospects at Area 4 have gross recoverable un-risked prospective oil resources of 115 million barrels of oil with an 18% chance of success.

Under a Maltese production sharing contract, MOG currently holds a 90 percent operated working interest through PEL, with Leni Gas & Oil Investments Limited holding the remaining 10 percent of working interest.

The first exploration period for the prospects runs until January 2013 with a minimum spend requirement of US$5 million.MOG anticipates that the 3D seismic survey will cost between approximately US$8 million and US$10 million gross to undertake, which would satisfy the minimum spend requirement.

Dominion has previously said that it planned to use a big chunk of the placing proceeds, US$12 million, on exploration and development in Malta.