A joint venture of Europa Oil & Gas and a private company registered in Scotland, Arenite Petroleum, has been conditionally awarded by Oil and Gas Authority (OGA), the UK oil and gas regulator, a Promote Licence over Block 41/24 in the Southern North Sea.
The Licence has been awarded as part of the 28th Seaward Licensing Round as part of the Second Tranche of Offers.
Block 41/24 adjoins the Yorkshire coast and contains 41/24a-1 & 2 stranded gas discoveries in Permian-aged Zechstein Carbonates and was previously held by Europa as a Traditional Licence (P.1131) from the 21st Round.
According to Europa Oil & Gas, the exploration emphasis of this Promote Licence is to address the Carboniferous prospectivity in the Namurian and Dinantian sequences. The company added that the adjoining onshore extension of the Cleveland Basin contains a number of gas fields and discoveries including Kirby Misperton, Ebberstone Moor and Cloughton.
Traditional Licence vs. Promote Licence
According to OGA, before an offer of a Traditional Licence will be made, an applicant must prove technical/environmental competence and financial capacity.
As for the Promote licence, the annual rental rate on a Promote Licence is reduced by 90% for 2 years. The licence requires financial, technical and environmental capacity to be in place, and a firm drilling (or agreed equivalent equally substantive activity) commitment to have been made by the end of the second year – or the licence will expire at that time.
Applicants do not need to prove technical/environmental competence or financial capacity before award of the Promote Licence, but they must do so within 2 years of its start date if they are to keep the licence. They will otherwise not be permitted to operate until they have done so.
Once this milestone has been achieved, the licence will become a Traditional licence with a duration of up to 26 years, the company has added.
Europa CEO Hugh Mackay said: “We are delighted to announce this award. As a consequence of previous and ongoing work we have considerable technical expertise on Carboniferous prospectivity as well as substantive seismic and other technical data in this area. The Promote Licence terms enable us to leverage this capability whilst at the same time managing costs and financial exposure.”
“The oil and gas industry onshore UK has been developing new exploration ideas and we hope to apply some of these ideas to good effect in the offshore extension. With the results of the latest UK onshore licensing round expected shortly and the ongoing round offshore Ireland, we continue to look to add to our exciting portfolio of multistage projects, which includes the company-making potential of our existing joint venture with Kosmos offshore Ireland, as well as the significant Wressle discovery onshore UK.”