TIDMFAST
RNS Number : 3179Z
Fastnet Oil & Gas PLC
10 December 2014
10 December 2014
FASTNET OIL & GAS PLC
("Fastnet" or the "Company")
APPOINTMENT OF CHIEF EXECUTIVE, OTHER BOARD CHANGES
AND OPERATIONAL UPDATE
Fastnet (AIM: FAST, ESM: FOI), the UK and Irish listed E&P
company focussed on near-term exploration and appraisal acreage in
Morocco and the Celtic Sea, announces the appointment of a Chief
Executive, other board changes and provides an operational update
on the Company's key assets.
Board Changes
The Company announces that Carol Law has been appointed Chief
Executive. Carol has been an Executive Director of Fastnet since 30
October 2012. In that role, she has worked closely with the
Company's senior management team to develop and execute its
near-term growth strategy. She has also worked with Fastnet's
technical teams and partners to de-risk and high-grade existing
opportunities to create shareholder value.(1)
As Chief Executive, Carol will lead the implementation of the
Company's strategy of monetising its existing assets and prudently
managing its significant cash reserves in order to restore and
create shareholder value.
In addition, the Company announces that Cathal Friel assumes the
role of Non-Executive Chairman, the original role he had at the
time prior to the Company's acquisition of Pathfinder Hydrocarbon
Ventures Ltd in July 2012. The Company also announces that Paul
Griffiths, Managing Director, has resigned from the Board and
leaves the Company with immediate effect to pursue other business
opportunities.
The Board now comprises two executive directors Carol Law as CEO
and Will Holland as CFO and three non-executive directors: Cathal
Friel (Non-Executive Chairman), Michael Nolan (Non-Executive
Director) and Michael Edelson (Non-Executive Director).
The Board has also agreed to seek to appoint an additional
independent non-executive director with suitable E&P industry
experience.
Operational Update
Given the rapidly changing economic conditions in the oil and
gas sector, the Board has undertaken a detailed review of its oil
and gas portfolio to ensure that the strategy to grow the Company's
business and monetise its assets remains on track.
The Board is committed to growing a successful oil and gas
business and believes that, in current market conditions, there are
and will be opportunities to develop the business. Given the above,
the Board also confirms that there is no current intention to
return capital to shareholders but it has resolved to keep all
options under review over the medium term.
An update on each of the Company's key assets is set out
below.
Ireland
Fastnet's licences in the Celtic Sea are all in good standing
and there are no outstanding financial commitments under the
current license periods.
A farmout process covering the Company's Celtic Sea portfolio
was initiated by Fastnet in May of this year with the intent to
close the dataroom and receive indicative offers by mid-October. A
number of companies engaged in a detailed review of the
opportunities, with several opening unofficial discussions of
potential interest in working towards a farm-in offer. However, the
recent rapid decline in the oil price has created a strategic shift
in the forward planning of many companies in the sector, resulting
in the delay of decisions and/or changes in strategy regarding
farm-in opportunities. Fastnet remains confident that its assets in
the Celtic Sea hold considerable value and believes there is
potential to unlock this value. The Board will continue to work,
taking into account the current adverse market conditions, towards
bringing in partners to further pursue exploration activities with
Fastnet in the Celtic Sea.
The Company notes the recent Lansdowne Oil & Gas
announcement in November of a farm-out of its Midleton gas prospect
with PETRONAS' subsidiary, Kinsale Energy. This suggests that a rig
could be in the region in the near term and could act as a further
catalyst for an extensive exploration programme in the region.
Onshore Morocco
Fastnet retains an option ("Option") to farm into the Tendrara
Lakbir Licence onshore Morocco ("Tendrara Licence") until 31
December 2014. The work programme included 3D seismic reprocessing
and reservoir engineering studies by two independent parties.
Results of the work undertaken support the materiality of the
conventional appraisal project on the Tendrara Licence. Fastnet
also recognises the potential for an unconventional gas play as
well as additional conventional exploration upside on the Tendrara
Licence.
The Company has been attempting to find farmin partners for
Tendrara since the middle of 2014, with the intention of closing
that process before the end of December 2014. It is the intention
of the board of Fastnet to try to agree an extension on this option
by 12 months to the end of 2015. However, these negotiations are
still continuing and Fastnet has also been pursuing and continues
to develop a series of strategic alternatives aimed at finding a
potential financial partner who may try to develop the possible
early monetisation of the Tendrara Licence. These initiatives are
based on the gas-to-power market in Morocco and involve both
downstream and upstream players. A further announcement on the
status of the option will be made in due course.
Offshore Morocco
Fastnet drilled the FA-1 well in the Foum Assaka Licence in the
Agadir Basin ("Foum Assaka Licence") earlier this year with its
partners Kosmos Energy (Operator), BP plc and SK Innovation. The
well encountered live oil shows and provided supporting evidence
for reservoir development.
The partnership is satisfied that it has fulfilled all the
current required commitments in respect of the Foum Assaka Licence.
Technical work is ongoing to incorporate all of the FA-1 well data
into the geological framework of the Foum Assaka License. The Foum
Assaka Licence contains multiple prospects with numerous future
drilling opportunities. Provided SK Innovation elects to
participate in a second exploration well on the Foum Assaka
Licence, Fastnet will have a carry of up to a gross well cap of
US$100 million.
Numerous wells are being drilled offshore Morocco in 2015 and
2016, demonstrating the continued industry interest in the
area.
The Royalty Agreement in relation to the Foum Assaka licence
area between Pan Maghreb Oil and Gas Limited and Pathfinder
Hydrocarbon Ventures Limited, a 100% owned subsidiary of Fastnet,
has now been terminated.
Financial Position
Fastnet's cash balance as of 30 November 2014 was US$18 million,
with no material outstanding license commitments. The Company's
current monthly corporate overheads are running at circa $275,000
per month.
The Board believes Fastnet is well-positioned to maintain its
licence portfolio and discretionary opportunities through existing
option agreements for a significant time.
Outlook
Although the recent decline in the oil price and adverse market
sentiment for the oil and gas sector has proved in the near-term to
be challenging for all oil and gas exploration companies, large and
small, the Board remains firmly committed to building a successful
oil and gas business. The Board will focus on restoring and
creating shareholder value through the implementation of its long
held strategy of monetising existing assets and by continued
prudent application of its significant cash reserves. As the
industry and markets adjust to the new levels of oil pricing, the
Board anticipates the industry focus will move towards profitable
shallow water and onshore projects in attractive fiscal regimes
with low operating costs. The Board believes Fastnet's portfolio
increases in marketability based on the above premise.
Cathal Friel, Non-Executive Chairman of Fastnet, commented:
"On behalf of the Board, I wish to welcome Carol Law as Chief
Executive. Having worked closely with her over the past two years,
I have seen at first hand the benefits to the Company of her
in-depth oil and gas experience and her deal-making expertise. I
look forward to Carol driving the Company and its strategy."
"I would like to thank Paul Griffiths for his contribution to
the Company and, in particular, his role in assembling the
Company's asset portfolio. I wish Paul very well in his future
endeavours."
Carol Law, CEO of Fastnet, commented:
"I am delighted to be appointed to the position of CEO at
Fastnet and look forward to continuing to work with the Board to
develop and execute our strategy. Our portfolio, both in Morocco
and Ireland, holds significant exploration upside and the work
programs carried out over the last 2 years have focused on
de-risking the opportunities towards unlocking their value for our
shareholders. Going forward, in the near term we will continue to
work to high grade our asset base and manage our strong cash
position through the current downturn in the energy sector. "
An updated corporate presentation is now available on the
Company's website
(http://www.fastnetoilandgas.com/investor-relations/presentations/2014.aspx)
Fastnet Oil & Gas plc
Cathal Friel, Non-Executive
Chairman
Carol Law, Chief Executive
Officer
Will Holland, Chief Financial
Officer +353 (1) 644 0007
Shore Capital
Nomad
Bidhi Bhoma, Edward Mansfield
Corporate Broking
Jerry Keen +44 (0) 20 7408 4090
GMP Securities Europe LLP
(Joint Broker)
Rob Collins, Emily Morris,
Liz Williamson +44 (20) 7467 2800
Davy
(ESM Adviser & Joint Broker)
John Frain, Anthony Farrell +353 (1) 679 6363
Bell Pottinger
Philip Dennis, Rollo Crichton-Stuart,
Jimmy Lea +44 (0) 203 772 2500
ENDS
Note to editors:
(1) Carol Law is a geologist by training with more than 30
years' petroleum industry experience in exploration management,
exploration geology, research, and consulting in a variety of
geological settings. She has been involved in exploration
activities in more than 40 countries and was a member of teams
responsible for discoveries in Mozambique (Rovuma Gas), Ghana
(Jubilee), Brazil (multiple Campos Basin discoveries), Alaska
(Nikaitchuq), China (Bohai Bay) plus Angola, the Gulf of Mexico and
others.
As Exploration Manager - East Africa & Caribbean for
Anadarko Petroleum Corporation, Carol was responsible for the team
that discovered the Prosperidade gas complex in Rovuma Area 1,
offshore Mozambique.
She was also a member of the technical team and later
Exploration Manager - West Africa, China, and Alaska for Kerr McGee
Oil & Gas. Technical and managerial responsibility amongst her
portfolio included offshore Morocco, including what is now the Foum
Assaka block held by Fastnet and Kosmos Energy. Carol's Kerr McGee
experience also included working in partnership with Kosmos Energy
in offshore southern Morocco, Benin, and Ghana.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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