Trapoil has decided to relinquish licence P.1556 Block 29/1c (Orchid) located in the western margin of the Central Graben immediately to the north east of the Bittern field, in the North Sea.
Further to the company’s announcement of January 8, 2015 when Trapoil relinquished a number of licences, the Board has decided to also relinquish Licence P.1556 Block 29/1c (Orchid), which was, according to the company, becoming unduly expensive to maintain. The decision to relinquish this additional licence was taken in conjunction with its partner following extensive efforts to secure a potential farm-out.
The impairment charge associated with the relinquishment of Orchid, to be recorded in the company’s results for the current financial year to December 31, 2014, is expected to amount to approximately £5.8m. Trapoil says that this impairment charge will not affect the company’s net unrestricted cash reserves, which amounted to approximately £7m as at December 31, 2014.
Licence P.1293, Block 14/18b – Athena Oil Field
On January 8, 2015, the Athena Oil Field, Licence P.1293, Block 14/18b (Athena), in which Trapoil holds a 15 per cent. equity interest, had achieved stabilized gross production rates of approximately 4,800 barrels of oil per day (bopd) (720 bopd net to Trapoil), following the completion of the work-over on the P4 production well and further intervention work on the P1 and P3 production wells.
According to Trapoil, production rates continue at around this level, however at the currently depressed oil price of approximately $58/barrel the field is significantly loss making and the company is currently incurring a cash outflow of approximately £380,000 per month after absorption of its share of the field’s operating costs.
“We are working closely with the operator and our other licence partners to advance opportunities to enhance the financial performance of the field,” the company said in the statement.
Exploration and Appraisal Interests
Trapoil continues to develop, and seek potential farm-out partners where appropriate, the remaining attractive exploration and appraisal assets in the group’s portfolio, including Licence P.1889, Blocks 12/26b and 12/27 (Niobe), for which a well is planned for Q2 2015; Licence P.1610 Block 13/23a (Magnolia), for which seismic evaluation work is ongoing in respect of a possible extension of the adjacent Liberator discovery; Licence P.1666, Block 30/11c (Romeo), a discovery requiring further appraisal; Licence P.1989 Blocks 14/11, 12 & 16 (Homer) and Licence P.2170, Blocks 20/5b and 21/1d (Cortina).