Feb. 2012 - Canadian Overseas Petroleum Limited (COPL)announced that its Sale and Purchase Agreement with BG for Block 22/15 in PL089 and Rest of Shallow Block 23/21 in PL101 has been terminated.

The termination of the SPA is a result of a dispute over additional funds required to be deposited by COPL into the escrow account established under the SPA. COPL was required at first to maintain funds in the escrow account for 75% of BG’s estimated dry-hole costs for the Esperanza, Newt, Lower Toad and West Columbus wells. If testing of the wells was required (a contractual determination on a pre-determined minimum hydrocarbon intersection), the escrow account was required to be topped up by 75% of the estimated testing costs on notice from BG.

As a result of the termination notice, COPL will not participate in any further drilling in Block 23/21, which includes the Lower Toad, Newt and West Columbus exploration prospects and the Upper Toad discovery.

COPL has communicated to BG that, given all payments and obligations for the drilling and testing of the Esperanza well have been made by COPL, COPL believes it retains all its rights in Block 22/15, which contains the Esperanza Discovery.

Nov. 2011 - BG Group has made a discovery in the Esperanza prospect in the UK sector of the North Sea. The 22/15-4 well reached a total depth of 9,427 feet (2,873 meters). The operator encountered a reservoir section in the Paleocene Forties sand at a depth of 8,684 feet (2,647 meters), which was drill-stem tested through 55 feet (17 meters) of perforations out of a gross interval of 73 feet (22 meters) of oil-bearing sand within the uppermost Paleocene Forties sandstone. While performing a drill stem test, the well flowed 39 degree API oil at an average rate of 1,784 Bbls through a restricted 36/64-inch choke. Poor weather conditions curtailed the well test before a maximum flow rate could be achieved. The operator said all necessary technical information was obtained, and no water or sand was produced during the test. Furthermore, COPL analysis of wireline logs and fluid samples conclude that in addition to the 52 feet (16 meters) of net pay situated within the uppermost Forties sandstone there is an additional 30 feet of extended potential pay.

Oct. 2011 - BG Group has commenced operations at its Esperanza prospect in Block 22/15 of the UK sector in the North Sea. The Ocean Nomad semisub is on location and currently waiting for the weather to recede to commence drilling operations. The Esperanza 22/15D well is targeting light oil in the Paleocene Forties sand. The well lies on a strong, far-offset amplitude anomaly at the northwest end of a 7-mile-long (11-kilometer-long) turbidite channel AVO anomaly that includes the Bank discovery to the southeast.