The West of Shetlands acquisition followed the company’s joint 50/50 bid with British-based Hurricane Exploration in June this year.
Drilling is planned for 2006/07.
Total project costs are estimated at £12.5 million, with Sunshine’s share being £6.25 million (A$15 million). Sunshine’s basic operating costs are estimated to be about £500,000 per annum (A$1.2 million).
In addition to the two main oil prospects located in 150 metres of water depth, Sunshine said the joint venture had identified an undeveloped oil accumulation and some strong leads.
Described as a “potentially very large unconventional target,” the first prospect could open up previously ignored UK continental shelf areas for exploration and development, if Hurricane’s data interpretation was correct.
Sunshine said the second prospect was a conventional target with a potentially large hydrocarbon trap, as recognised from existing seismic data. A previous exploration well drilled nearby showed promising oil and gas indications. Current mapping showed the extent of the reservoir was about 20 square kilometres, said Sunshine.
The joint venture has also identified some leads, which comprise conventional clastic sandstone opportunities of similar age to nearby discoveries.
The UK Department Of Trade And Industry, which offered the blocks, said it believed the UK Continental Shelf (UKCS) was still highly prospective for oil, despite exploration and production existing there for many years. It forecasted there were many billions of barrels yet to be discovered.
Sunshine said the shallow waters west of the Shetland Islands could be geologically challenging, but the DTI has offered the license on frontier terms, extending the term by two years, which allows explorers to screen much larger areas.
The nine blocks offered are: 202/4, 202/5, 204/30, 205/21a, 22, 23, 24, 26b and 205/28.
The project partnership comprises: Sunshine (50%) and Hurricane (operator and 50%).
Other Australian companies to win blocks in the latest UK licensing round include Elixir, Nido Petroleum and Norwest Energy.
