Island Oil & Gas says that following the completion of negotiations with the Office National des Hydrocarbures et des Mines (ONHYM) , the Zag Reconnaissance Licence has been upgraded to a full Exploration Licence, which was signed on the 18th of June in Rabat and was approved for release by ONHYM on the 17th July.

The high resolution aeromagnetic survey completed earlier in 2009, which was integrated with surface and subsurface data, indicated some structures; including a 60 km long anticline with the potential for hydrocarbon reserves.

The Agreement is valid for up to 8 years and covers a work programme which includes seismic acquisition and geological studies within the first thirty months.

San Leon Energy operates the Zag Exploration Licence with a 37.5% stake, Island has a 15% interest, and ONHYM has 25%. The other partner is Longreach Oil and Gas with 22.5%. ONHYM’s 25% interest is free carried until a discovery is made and the development phase is agreed to have commenced.

Commenting on the Licence awards, Paul Griffiths Island’s CEO said: “This is excellent news for Island Oil & Gas. We are now moving forward on three fronts in Morocco, which has become a key area of focus. We are committed to what we believe to be one of the most attractive emerging petroleum provinces in the world.

We are confident that Zag is of considerable prospectivity and we look forward to working with our partners to fully realise the value of the Zag licence.”

Tags: Island Oil & Gas