Upland Resources Limited (LSE: UPL), the oil and gas company actively building a portfolio of attractive upstream assets, is pleased to announce that its wholly-owned subsidiary, Upland Resources (UK Onshore) Limited (“Upland UK”), has signed a farm-in agreement with Corallian Energy Limited (“Corallian”) for a 40% working interest in UK Seaward Production Licence P2235 (UKCS Block 11/24b) (the “P2235 Farm-in Agreement”) containing the Wick Prospect.
· The large Wick Prospect lies in the Inner Moray Firth, only 2km from land and in shallow water.
· Offers Upland a relatively low risk, low cost, potentially transformative near term drilling opportunity using a jack-up rig in late 2018. Corallian has already begun environmental permitting for the well.
· Upland has carried out an extensive assessment of the technical risks, undertaken a full interpretation of the existing well and seismic data, and remapped the area.
· The Company estimates the Wick Prospect could hold in-place P50 resources of around 250 MMbbl.
· Upland continues to interpret the data and believes additional, attractive prospects are likely to be found in the permit area.
· The Licence area benefits from an extensive 3D dataset, lies close to the large Beatrice Field, updip from the Lybster Discovery and in the same working petroleum system.
Upland UK is likely to hold the largest interest in the P2235 Licence and be the only co-venturer that is part of a listed entity. The Company will pay 53.33% of the first £4.2 million of costs related to the environmental survey and the first Wick well; costs above that cap will be funded pro rata to interests in the Licence. The Wick well is currently estimated to have a total dry-hole cost of about £4.2 million.
Completion of the P2235 Farm-in Agreement is conditional on, inter alia, the approval by the UK Oil & Gas Authority of Upland UK as a farminee to the Licence, availability of funding to Upland UK sufficient to satisfy its obligations under the P2235 Farm-in Agreement and the Licence continuing in full force and effect.
Steve Staley, CEO of Upland Resources Limited, said:
“I am delighted to announce this deal, which will (subject to completion) move the Company into the second phase of our strategy. The Wick Prospect and other potential targets within P2235 could host large volumes of hydrocarbons which, with near term drilling, gives Upland a clear pathway to potentially transformative value growth.
“We have taken our time in assessing this opportunity, in particular to gain a good understanding of the key fault risk in the Wick Prospect, before making an investment decision. This, alongside the continued cost pressures within the rig market, therefore presents us with a very exciting opportunity.
I look forward to updating shareholders as to our progress towards exploratory drilling on Wick in due course.”
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned