Today UK Oil & Gas PLC (London AIM: UKOG) announced that it has signed binding heads of agreement with Aladdin Middle East Ltd (“AME”), an independent oil company with 60 years of operational experience in Turkey.
To take a 50% non-operated working interest in the 305 km² Resan Licence (“Licence”). UKOG will take an active technical role in a 5-well oil appraisal and step-out exploration drilling programme, which, Covid and weather permitting, is expected to commence this year.
We took the opportunity to speak with Stephen Sanderson, UKOG’s Chief Executive and let him explain today update and what it means for the company.
Stephen Sanderson, UKOG’s Chief Executive, commented:
“Whilst we remain committed to growing our core UK business, this was an irresistible opportunity to expand our horizons and to expose the company to potentially transformational recoverable oil reserves that can be rapidly monetised.
The quality of the Licence’s geological address and opportunity is compelling, the targets being directly on trend with the geological look-alike East Sadak field and located within the same petroleum system as the major oil-producing Kurdistan region of Iraq.
The Basur and Resan appraisal opportunities compare well with our Loxley and Arreton projects. However, they offer significantly larger upside potential, are much cheaper to drill and can be monetised far more quickly than any of our UK projects. The overall post-tax share of gross revenues is also marginally better than in the UK.
The low cost of drilling compared to the UK also means that, in the success case, we plan to have a near continuous drilling programme, hopefully commencing this year, Covid and weather permitting. We expect this programme will provide a regular stream of newsflow.
Our new partners, AME, are a proven leading Turkish operator, oil producer and successful Turkish explorer. We will undoubtedly benefit greatly from their unrivalled Turkish knowledge and experience.”
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