UK: Caithness, Trap Oil swap Moray Firth interests

A subsidiary of Caithness Petroleum Ltd., private British independent, has closed an agreement with a unit of Trap Oil Group PLC to revise the equity interests and carried work obligations that relate to the P1270 (Block 11/24) and P1286 (Block 11/23) shared licenses in the UK Inner Moray Firth.

Caithness Oil Ltd. acquires 100% of the working interest and retains operatorship in the highly prospective Forse prospect. It returns to Trap the 35% interest that it acquired in the Knockinnon discovery under a farmout and no longer has an obligation to carry Trap on the drilling of a future well.

Caithness retains its original 30% working interest in Knockinnon and can participate in a well if drilled by Trap. Knockinnon was discovered in 2000 and enhanced by a Caithness 3D seismic survey in 2007. Consulting engineers assign 9.2 million bbl of proved and probable reserves to Knockinnon, but no oil-water contact has been encountered so large upside exists.

Caithness continues to receive 80% of revenue from Lybster field production until it recovers its historical capital expenditure.

The large Forse prospect extends to the Caithness coastline on UK North Sea blocks 11/23 and 11/24. Independently audited estimates assign a 97 million bbl midrange prospective resource to the Forse Volgian interval, with additional upside present at the Beatrice and Triassic intervals. An exploratory well is planned in 2013 to test all three intervals.

Forse and Knockinnon could be developed from shore.

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