Petrel Energy (ASX: PRL) should trade higher after receiving an independently certified prospective resource of up to 3 trillion cubic feet of gas for the 94,000 hectare Tesorillo project in the Cadiz Province, Spain.
Netherland Sewell and Associates compiled the estimate for Tesorillo, which is majority controlled by Petrel and partner-operator, Schuepbach Energy International.
Petrel currently holds a net 21.25% interest in Tesorillo via its 25% shareholding in Schuebach, with an option to move to 51% later in 2013 which, if exercised, would give it a 43.35% interest in Tesorillo.
These large prospective gas resource numbers provide insight into the upside potential of the Tesorillo project, and should a larger than expected gas column be confirmed, these preliminary estimates could be conservative.
The North African Maghreb gas pipeline is located within close proximity to the permit areas, and with high European gas prices, any reasonable flow rate would be readily commercial.
Petrel is likely to exercise its option this year to move to 51% of Schuebach to increase its stake in both its Spanish and Uruguayan assets.
The Spanish Joint Venture has engaged UK energy advisors Challenge Energy to manage the farm-out process with bids requested by mid-January 2014.
This is aimed at attracting qualified partners to fund further appraisal of the discovery by drilling and other activities.
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