Enegi, the independent oil and gas company, has reached agreement with Azimuth Limited with a view to farming-out part of Block 22/12b, in the UK North Sea, to Azimuth.
The Block contains the Phoenix discovery (the “Phoenix Area”) with the remaining acreage on the Block being made up of potential exploration opportunities (the “Exploration Area”). Under the agreement, Azimuth, given their extensive exploration expertise, will earn a 50% interest in the Exploration Area in exchange for the completion of an agreed work programme that includes certain geological, geophysical and reservoir analysis utilising existing seismic and well data in respect of both the Phoenix Area and the Exploration Area. The above transaction is subject to completion of documentation and all appropriate regulatory approvals.
Alan Minty, CEO of Enegi Commented:
“This is the second farm-out agreement that we have completed with Azimuth and we are delighted to be working with them and have access to their extensive exploration expertise on both our North Sea assets. Both deals are completely in line with our strategy of de-risking our portfolio whilst maintaining a significant interest in work programmes which we believe have the ability to deliver value to the Company for a minimal capital outlay. These are very exciting times for Enegi as we progress our projects across our entire portfolio.”
Block 22/12b is located in the Forties-Montrose High area of the Central North Sea and contains the Phoenix discovery. A discovery well was originally drilled by Shell and showed a 30 ft oil column in the Forties Sandstone Member, a proven producer in nearby fields such as Forties, Nelson and Montrose. The discovery is a low relief dip closed structure in water depths of 295 ft. Internal estimates of unrisked STOIIP range between 15 and 99 MMBBL, with unrisked recoverable resources of between 9 and 51 MMBBL. DECC have classified the Phoenix field as a Significant Discovery, meaning that the field could have achieved flow rates in excess of 1,000 BOPD.
This licence was awarded to Enegi in the 27th Seaward Licensing Round for UKCS last October. Enegi applied for this licence based upon on the identification and detailed evaluation of assets which the Company viewed was suitable for buoy technology as conventional development solutions may not have been economically feasible.
David Sturt, SVP of Azimuth commented:
“Azimuth is excited to be progressing its relationship with Enegi by entering into this agreement over the Exploration Area of Block 22/12b. The agreement between Azimuth and Enegi allows both parties to leverage their core strengths in creating value for their shareholders. The structure of the deal allows the full potential of the block to be realised by highly motivated and dynamic partners.
We believe that new technology and new concepts can unlock significant value in the North Sea, which contains substantial yet to find resources. We are actively exploring throughout the North Sea and West of Shetland and pursuing additional exciting opportunities to extend our portfolio.
Across its portfolio Azimuth is focused on creating value rapidly by combining the potential of new technology with extensive exploration experience. Co-operation between Azimuth and Enegi is excellent and we are excited to progress the exploration of Block 22/12b without delay.”
Press Release, February 11, 2013