Falkland Islands : Argos Resources raises A322 million to join Falkland Islands exploration party.
Argos Resources has raised [pounds sterling]22 million ([pounds sterling]20.6 million net of costs) in a placing of new ordinary shares at 31 pence per share which will give the company a market capitalisation of [pounds sterling]67 million. Earlier this month, the Financial Times reported that Argos was hoping to raise [pounds sterling]70 million with a [pounds sterling]200 million market capitalisation. Evolution Securities is Argos Resources Broker and Nominated Adviser.
Led by John Hogan, a geologist, who joined the Board in 2005, Argos Resources has a 100% interest in Production Licence PL001 covering an area of approximately 1,126 square kilometres in the North Falkland Basin. Two wells were drilled on the acreage in the first Falkland Islands drilling campaign in 1998 but the wells were plugged and abandoned as uncommercial after having oil shows. The Licence Area also adjoins licence areas being explored by Rockhopper Exploration and Desire Petroleum, who are of course leading players in the ongoing 2010 Falkland Islands drilling campaign.
Argos Resources reckons that approximately 30% of the Johnson Gas discovery, drilled by Shell in 1998 but only declared as a discovery by Rockhopper Exploration in 2009, extends into Licence PL001. Argos Resources has not had the benefit of access to Rockhopper Exploration s 3D seismic or any of their proprietary studies and will no doubt have to enter negotiations with Rockhopper Exploration on the subject in due course.
Based on recently reprocessed and reinterpreted 2D seismic data acquired in 1997, Argos Resources has identified seven prospects and five leads in Licence PL001. According to Argos Resources, the prospects have a total unrisked potential of 747 million barrels of prospective recoverable resource in the most likely case, and up to 1.75 billion barrels in the upside case.
With the funds raised Argos proposes to undertake a 3D seismic programme in 2010/2011 to better define a number of those prospects, and potentially to identify new prospects, leading to the selection of possible targets for a subsequent drilling programme in Q4 2011 and 2012.
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