Petrel Resources Regulatory News (PET)

17th October 2011

Petrel Resources PLC

Petrel awarded two blocks in Irish Offshore Licencing round

·; Petrel is awarded two licensing options in the prospective Porcupine Basin.

·; These licences total 1,405 km2 in extent, and compare well in prospectivity with any frontier acreage of any emerging oil & gas province.

·; Ireland's fiscal terms are competitive internationally.

·; Petrel's technical team has detailed knowledge of offshore Ireland.

The Irish Atlantic margin has an established petroleum system, though there have not yet been large discoveries.

Irish fiscal terms are competitive internationally. The tax regime is that there is a special Corporate Tax rate of 25% applying to profits from petroleum production and an additional Profit Resource tax of between 5% and 15% that applies in the case of more profitable fields. The Profit Resource Tax is determined by the ratio of profit to capital invested.

Significant gas discoveries will have a ready market. According to the International Energy Agency, Ireland is 58% dependent on gas for electricity generation, of which 95% is imported. Two interconnectors link Ireland to the Scottish pipeline system and general European gas grid.

To encourage discoveries and domestic hydrocarbon supplies, 257,200km2 of sedimentary acreage, including most of the available Atlantic acreage, was opened up by the Irish Department of Communications, Energy and Natural Resources in late 2010 for bidding in May 2011.

At a Conference in Dublin on 17th October, Minister of Communications, Energy and Natural Resources Pat Rabbitte TD announced the results of the bid round.

The Minister has offered Petrel Resources plc a total of 1,405 km2 of prospective acreage in the Porcupine Basin, including Licensing Options over blocks 35/23, 35/24, the key parts of 35/25, 45/6, 45/11, 44/15 and 45/16. 

David Horgan, Managing Director, commented:

"This is excellent news: the high hydrocarbon prices, fast-developing offshore technology and a proven hydrocarbon system means that Ireland's opportunity for offshore exploration has finally come.

Petrel bid for Irish offshore acreage in May 2011. We focused on the prospective Porcupine Basin, of medium water depth (1,500 metre). The petroleum system is proven, water depth moderate, title secure and fiscal terms attractive.

There was considerable industry interest in the current round. We are delighted to have been offered two blocks. We have already started initial work and look forward to executing this exciting project.

There will be discoveries in the Irish offshore."

Enquiries:

www.petrelresources.com