Egdon Resources has acquired a 100% interest in a North Sea license from Arenite Petroleum and Europa Oil & Gas Limited.
The acquired Promote Licence P2304 is located in to the immediate south of Egdon’s license P1929 offshore North Yorkshire, which contains the 1966 Resolution gas discovery.
As for the payment, Egdon said the consideration comprised the immediate reimbursement of the 2017 license rental, OGA Levy and vendors’ legal costs (c. £15,000 in total) and future staged payments contingent on the successful completion of various potential exploration activities and/or on reaching certain production milestones.
Mark Abbott, Egdon Resources, Managing Director said: “We are pleased to have acquired this highly prospective acreage at a nominal up-front consideration. The license contains a mapped extension of the Resolution gas accumulation and an additional proven gas discovery. We will now work to integrate our evaluation of the new license into our detailed understanding of P1929 with a view to progressing appraisal of the proven gas resources in the combined area.”
The Resolution discovery structural closure is mapped by Egdon as extending southwards from P1929 into P2304 and the license also contains a second gas discovery confirmed by wells, 41/24A-1 (1969, Total), 41/24A-2 (1981, Total), and 41/24-3 (1993, Conoco) which tested at rates of up to 34 million cubic feet of gas per day and 1280 barrels per day of condensate from the Plattendolomit, a Zechstein carbonate unit slightly younger than the Hauptdolomit reservoir tested in the Resolution discovery well. As with P1929, P2304 contains additional prospectivity in deeper gas bearing Carboniferous sandstones underlying the proven Zechstein reservoir sequences.
“The sale of our interest in P2304 eliminates our exposure to ongoing costs whilst retaining our exposure to future drilling success,” Europa CEO
On completion of the acquisition of a 3D survey over any part of the license Egdon will pay £50,000. Furthermore, on completion of the drilling of the first well located wholly or partly within the area covered by the license a cash payment of one hundred thousand Pounds (£100,000).
Furthermore, on first production, other than testing, from any well located wholly or partly within the area covered by the license Egdon will pay £100,000. Also, on reaching a total production of five billion standard cubic feet of gas (5 bcf) (or oil equivalent) from any wells in the lincese Egdon has committed to pay £200,000.
Finally, on reaching a total production of twenty billion standard cubic feet of gas (20 bcf) (or oil equivalent) from any wells located wholly or partly within the area covered by the license, Egdon will pay £1,000,000.
Europa’s CEO, Hugh Mackay, said: “The sale of our interest in P2304 eliminates our exposure to ongoing costs whilst retaining our exposure to future drilling success. Furthermore, combining P2304 with Egdon’s licence is anticipated to enhance the possibility of delivering farmout success to the benefit of all parties to the transaction. Today’s disposal is in line with our strategy to optimise the risk / reward trade off across our onshore UK and offshore Ireland exploration portfolio. We continue to focus on securing farm outs, specifically within our industry leading portfolio of offshore Ireland licences, and I look forward to providing further updates in due course.”
Offshore Energy Today Staff