Premier Oil takes up North Sea option

FTSE 250 oil and gas company Premier Oil has exercised its option to drill the East Fyne appraisal well in the UK Central North Sea.Premier has a joint venture and earn-in agreement relating to the area of the North Sea containing the East Fyne well with oil and gas firm Antrim Energy. Under the terms of the agreement Premier will have a 39.9% operated interest in Block 21/28a, which contains the Fyne field, in return for stumping up to $50m towards the development costs, including the East Fyne appraisal well. Antrim retains 35.1% interest in the block and a 100% working interest in the adjacent Blocks 21/28b, 21/29c, 21/24b and 21/29d (Greater Fyne Area). First Oil Expro retains an interest of 25% in Block 21/28a.The agreement also provides Premier with the option to participate at a working interest of up to 50% alongside Antrim in a planned drilling programme scheduled to start as early as the second quarter of 2011 in the Greater Fyne Area.The East Fyne appraisal well is designed to de-risk the eastern extent of the Fyne Field in Block 21/28a and is expected to be drilled in the second half of 2011. Simon Lockett, chief executive officer, commented: "This agreement is an excellent example of our ability to utilise our strong financial and operating capabilities to build in our core areas."---ab