Pennine moves ahead on Albania’s Velca block

Pennine Petroleum Corp. has committed to explore and develop the 620-km Velca block in southern Albania near the city of Vlore. The operator has signed a 6-year exploration lease that is convertible to a 25-year production license upon discovery of oil or natural gas.

Pennine Petroleum Corp. has committed to explore and develop the 620-km Velca block in southern Albania near the city of Vlore (OGJ Online, Dec. 7, 2015). The operator has signed a 6-year exploration lease that is convertible to a 25-year production license upon discovery of oil or natural gas.

Pennine reported in 2015 that the Velca block contains reservoirs of Ionian subthrust carbonates, which are similar in structure to the foothills of western Alberta. The operator intends to survey all available data to complete a technical report identifying potential drilling targets within the first 60 days. The production-sharing agreement includes commitments from Pennine to drill two wells to a minimum of 2,500 m.

Partners include Albania’s Ministry of Energy and Industry and state-owned Albpetrol ShA Pennine will recover exploration and development costs from 90% of the net operating revenue, after Albania’s 10% state royalty tax. Pennine and Albpetrol will retain 100% net working interest in future production until after costs are recovered at which time, Albania’s Ministry of Energy will maintain 50%.

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