MOG reveals prospect of 260m barrels of oil in Area 4, offshore Malta

ERC Equipoise Ltd (ERCE) has estimated the total mean unrisked prospective resources for the prospects as 260 million barrels of oil. The four areas have been named by MOG as Hagar Qim, Tarxien, Skorba and Dalam.

Hagar Qim has a mean estimated total of 109 million barrels, Tarxien, 51 million, Skorba 47 million and Dalam 53 million.

An alternative higher risk, 'reef' model has also been proposed for Tarxien.

ERCE has estimated an additional upside of 27 million standard barrels in the event that the Tarxien prospect does prove to be a 'reef' model, the company said.

Mediterranean's chief executive Bill Higgs told investors today that "importantly, this independent review of the Area 4 prospects by ERC Equipoise confirms the technical evaluation of the exploration potential carried out by the company. Moreover, a detailed economic evaluation confirms that, if proven by drilling, the prospects identified at the Eocene/Palaeocene can be economically viable on a stand-alone basis."

Higgs said that his company was  looking forward to testing the first of these prospects with the drill bit by the end of 2013, pending completion of the farm-out agreement with Genel Energy announced in August."

The firm's subsidiary PECL entered into a farm-out agreement with Genel Energy last August to sell 75 per cent of its interest in Area 4.

The deal is conditional on approval by the Maltese authorities, which are still conducting due diligence analysis on Genmel Energy and its directors, which include former BP chief executive Tony Hayward.

The contract also provides for a grant of a minimum one year extension of the first exploration period of the Area 4 production sharing contract. Shares in the company were up 2.7%, at 14 pence in London today.