Operations in Spain

Abiego, Barbastro, Binéfar and Peraltilla Exploration Permits

Abiego, Barbastro, Binéfar and Peraltilla Exploration Permits - Onshore Spain

Serica 75% (operator), Beach 25%

Serica was awarded the Abiego, Barbastro, Binéfar and Peraltilla exploration Permits onshore northern Spain in November 2003. The Permits are located between the Ebro Basin and the Pyrenees, within the Autonomous Community of Aragón, and cover an area of approximately 1,100 square kilometres. The permits lie approximately 40 kilometres southeast of the Serrablo gas field and approximately 10 kilometres southwest of the Centenera gas discovery.

The four Permits lie on the trend of the Barbastro anticline, a surface feature that extends for over 100 kilometres. During the 1960s and 1970s several wells were drilled in the area. However, due to the sparse and poor quality seismic data available at that time, most of these wells were located off-structure. Nevertheless, numerous oil and gas shows were recorded in many wells, with the nearby Centenera-1 well flowing over 2 mmscfd from shallow Cretaceous limestones in 1967.

In 2007, Serica entered into a farm-out agreement with Beach Petroleum Limited, under which Beach has earned a 25% interest in the permits, with Serica retaining 75% and operatorship. A new 2D seismic survey comprising some 315 kilometres was acquired by Serica in 2008. The data from this survey is of high quality and, as a result, several prospects have been mapped at both shallow and deeper levels. The Spanish gas market would readily absorb any gas produced from the Permits and there is a main gas trunk pipeline in close proximity.

In order to allow more time to complete environmental and well planning studies, the government agreed to suspend the Permits. A drill or drop decision must be made prior to November 2010 and Serica is seeking a farm-in partner.