Trapoil, an oil and gas exploration and appraisal company focused on the UK Continental Shelf (“UKCS”) region of the North Sea, has farmed out 80% of its working interest in its Kew asset (P.1864, Block 9/24d) to Centrica North Sea Oil Limited ( (60%) and JX Nippon Exploration and Production (U.K.) Limited (20%) .
Centrica ,who will assume operatorship, and JX Nippon will undertake preliminary seismic based work, following which they will, at their election, provide Trapoil with a full carry on an appraisal well designed to fully evaluate the Kew discovery. If the appraisal well proves to be successful, the P.1864 Group will seek to complete and submit a Field Development Plan to DECC.
The estimated carry and farm out costs that Trapoil will receive ranges from £4.75 million, should Centrica and JX Nippon elect not to drill the appraisal well, to £10 million if a positive election is made. Trapoil estimated £17 million of carried activity and farm in income would be gained following the acquisition of Reach Oil and Gas Limited. The successful farm out of Kew demonstrates the considerable value in the Reach portfolio.
Mark Groves Gidney, Chief Executive Officer of Trapoil, commented:
“We are delighted to have concluded this Farm out of Kew. The opportunity to work with Centrica and JX Nippon on this exciting appraisal project means that Trapoil will be able to see Kew through to development, without the requirement for the financing of what will be expensive wells. In addition, the upfront cash payments received under the terms of the Farm-out provide the Company with additional cash resources.”
Kew was awarded as a Promote Licence in DECC’s 26th Licensing Round. Trapoil acquired a 100% working interest and operatorship of Kew following the successful acquisition of Reach Oil & Gas Limited in July 2011.
Block 9/24d is located in the South Viking Graben and contains the undeveloped gas-condensate discovery, Kew, discovered by well 9/24b-3. Kew is a Brae style submarine fan play and is analogous to the Devenick field located on trend to the south
Offshore Energy Today Staff , November 25, 2011