Update on VG-3 Well, California
Reabold, the oil and gas investment company, is pleased to announce that work is progressing as planned at the Venturini-Ginochio #3 (“VG-3”) well, which is intended to be put onto production shortly. Photos of the progress can be seen on the Company’s Twitter page, @ReaboldPLCÂ
The test oil produced so far has been sold and the pad at VG-3 is currently being enlarged to a sufficient size to accommodate both production and drilling equipment as we assess the location and timing of the follow-up well at West Brentwood.
Q&AÂ
Why can’t I buy Reabold shares through some broker accounts?
We believe that some brokers, including Halifax and Lloyds, have incorrectly identified Reabold as a PRIIP (Packaged Retail and Insurance Based Investment Product). We have informed these brokers that we believe Reabold does not fall under this definition but unfortunately they are not willing to reclassify Reabold.
We have subsequently contacted the FCA in attempt to get clarification that Reabold is not a PRIIP. The FCA is reviewing the unintended consequences of PRIIP legislation and we are continuing to liaise with the FCA to resolve this issue.
Where is Gaelic Incorporated?
Gaelic Resources is incorporated in the Isle of Man.
Is Colter fully funded?
Yes. Reabold’s initial investment of £1.5m resulted in the well being fully funded for drilling at a planned 40% Corallian interest. Following the Corallian fundraise, Colter is now fully funded at the higher working interest level of 50%.
Do Reabold have to pay for drilling/exploration Joint Venture costs?
Reabold is an investor in Corallian and Danube Petroleum Ltd, and as such, is not subject to operational cash calls in the way that a joint venture partner would be. Reabold therefore has no further costs to fill before the Colter, Wick and Parta projects are drilled.
When is Colter being drilled?
Colter is being drilled in Q4 2018.
When is Parta being drilled?
A two-well appraisal campaign at Parta is scheduled for Q4 2018/Q1 2019.
When is Wick being drilled?
Wick is planned to be drilled in Q4 2018.
How will Corallian pay for Wick?
Wick is fully-funded at a 25% Corallian interest by a carry on the well from Upland Resources and Corfe Energy. Following the Corallian fundraise, Corallian will be funded to exercise an option to drill Wick at a higher, 40%, working interest. Corallian will be fully funded to drill Wick at 40%.
Have the necessary environmental regulations been passed for Colter?
The UK process is based on a staged passing of various regulatory requirements. Based on these expected timelines, the operator anticipates Colter is on track for drilling in Q4 2018.
The drilling of Colter is an offshore activity and is therefore subject to regulations imposed on it by the Oil and Gas Authority. The regulatory process is very different from that required for an onshore well.
What effect do changing oil and gas prices have on Reabold?
Reabold is an oil and gas investor with oil production assets. This means that rising oil and gas prices have positive, yet subtle effects on the Company and its growth.
Firstly, as a producer, Reabold directly benefits from rising global oil prices through the sale of oil from its Californian assets which are priced in Brent Crude. Similarly, the value of de-risked resources and reserves which Reabold has proved through drilling, track oil and gas prices.
As an investor, however, the effect of oil and gas prices changing has a more subtle effect on the Company.
As defined by its strategy, Reabold focuses on projects which the industry does not value correctly. This valuation anomaly exists primarily as a result of the oil and gas industry’s focus on increasing reserves and, ultimately production. This has meant that production opportunities, which are contingent on oil and gas prices, have been valued highly during the oil downturn.
With a focus on production acquisition, appraisal or low-risk exploration opportunities have been less highly valued and are not contingent on current oil and gas prices. This poor valuation of these opportunities has provided an opportunity for investors such as Reabold to provide capital and to prove reserves through low cost, near-term drilling. By de-risking these assets through drilling, they become more interlinked to oil and gas prices.
Find out more about Reabold’s strategy here: https://reabold.com/about-us/strategy/
When capital is available to the Company to invest, how quickly can that be deployed into another project?
In the case of capital raised through capital markets, quick deployment is a key focus for the Company. However, unlike many companies, Reabold does not raise capital to fund a specific, defined project or activity which it already owns but instead the Company markets several potential investment opportunities that have been matured before entering a roadshow in order to give a flavour of the opportunities available to the Company.
Will Reabold participate in any additional projects in the near future?
We continue to believe that this is a fantastic time to deploy capital into upstream oil & gas projects, as costs remain low and opportunities abundant. We are constantly assessing a number of projects and remain in a strong position to execute on further transactions.
