GOLD OIL SEEKS PARTNERS TO DEVELOP PERU FIND / THE FINANCIAL TIMES

Gold Oil seeks partners to develop Peru find

By Neil Hume

Published: November 4 2009 17:20

Gold Oil, an exploration group focused on Latin America, is seeking partners to help fund the development of what could be a large oil discovery off the coast of Peru.

The Aim-listed (www.londonstockexchange.com)company has started discussions with sovereign wealth funds based in the Middle East about taking an interest in Block Z34, which lies west of four of the largest developed oil fields in northern Peru. These fields have already produced a total of 1.6bn barrels of oil.

Gold Oil has analysed seismic data and identified six drilling leads it believes could have significant commercial potential. Some of these are in 200ft-300ft of water, although the most promising lies in much deeper water.

Although the leads have yet to be independently reviewed, Gold Oil believes it has confirmed the extension of a neighbouring field, known as Z2b. This is operated by Petro-Tech Peruana, a joint venture between Ecopetrol, Colombia’s largest oil company, and the Korean National Oil Company. Production at Z2b is currently about 14,000 barrels of oil a day.

Mark Pritchard, Gold Oil chairman, said he was excited by the initial data, although he stressed further testing was needed. “We believe there’s the potential for a significant oil find in Z34,” he said.

Gold Oil acquired the 30-year licence for Z34 in 2007 and then sold a 50 per cent interest in the block to another small oil company, Plectrum Petroleum, that was subsequently acquired by the larger Cairn Energy. Cairn decided it had no interest in the region and handed the stake back to Gold Oil in October last year.

Mr Pritchard estimates Gold Oil will need $60m-$75m to fund development of Z34 and drill three exploration wells.

Gold Oil, which also has interests in neighbouring Colombia, floated on Aim in 2004. Its shares, which listed at 1p, closed up 0.09p at 4.14p, valuing the company at just over £20m.

Copyright The Financial Times Limited 2009.