TIDMNUOG
RNS Number : 9524X
Nu-Oil and Gas PLC
30 November 2017
30 November 2017
NU-Oil and Gas plc
("NU-Oil" or "the Company")
Operational Update - PL2002-01(A)
The Company is pleased to provide an update regarding operations
on its wholly owned Garden Hill site in western Newfoundland, which
are being undertaken and financed by PVF Energy Services ("PVF")
under the Production Sharing Agreement announced on 31 January
2017.
The primary objective of the first phase of the Work Programme,
as outlined in announcements earlier this year, is to clean up the
well and remove obstructions that have been preventing the well
from flowing in advance of an extended well test. Progress achieved
thus far includes:
-- Salt blockages have been cleared.
-- Communication has been re-established between the reservoir and the surface.
-- Pressure recovery is strong.
-- PVF have experienced no issues that are believed to have the
potential to compromise the successful completion of this first
phase of the Work Programme.
Although the programme is taking longer than originally
forecast, the Company can confirm, based on the guidance provided
to it by PVF, that operations are advancing towards achieving the
primary objective and it is confident that the well test will
commence shortly. Technical programmes often have to be modified
and in western Newfoundland this requires approval from the
Department of Natural Resources ("DNR") for any alterations before
proceeding. In addition, due to the remote location and the lack of
local oilfield supply services, equipment has to be brought in from
outside the province, which takes time both to source and to be
delivered.
The Company has begun negotiations with PVF to agree a farm-in
which will bring additional investment into the development of
PL2002-01(A), primarily in the form of drilling investment. Further
drilling is likely to target areas of hydrothermal dolomite
down-dip from the current PAP#1-ST#3 well, which demonstrate
enhanced connectivity and porosity and are therefore believed to be
able to deliver higher flow rates. NU-Oil has in the past
undertaken significant reservoir modelling work and will work
closely with PVF to ensure that this work and lessons learned from
previous operations are fully integrated into future planning,
alongside new data gathered from PVF's work, to maximise chances of
success. Negotiations on the farm-in agreement, which has been the
objective of both parties as referenced in the announcement of 22
June 2017, are ongoing and the Company will provide an update in
due course. Shareholders should note that, whilst both parties hope
to conclude an agreement, there is no guarantee one will be
reached.
Alan Minty, Chairman of NU-Oil, commented:
"A key factor in achieving a successful completion of the first
phase of the Work Programme is managing the difficult logistics and
working environment in western Newfoundland. Although the programme
is taking longer than originally forecast this does not diminish
our confidence in, or commitment to, delivering this project. We
remain confident of the successful conclusion of this first phase
of operations and we look forward to announcing the results in due
course.
"We are pleased to be continuing negotiations with PVF on the
future development of the Garden Hill field, one of our legacy
assets, which we believe, if successfully concluded, will provide
the opportunity for NU-Oil to maximise its returns from the
field.
"In the meantime, the Board remains committed to focusing its
resources on the acquisition of marginal field projects, in line
with our stated strategy."
Enquiries
NU-Oil and Gas plc
Simon Bygrave, Investor Tel: +44 (0)161 817 7460
Relations
Nigel Burton, CEO Tel: +44 (0)7785 234 447
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Rory Murphy
Ritchie Balmer
Jack Botros
Beaufort Securities Limited Tel: +44 (0)20 7382 8300
Jon Belliss
Elliot Hance
Note to Editors
PL2002-01 (A)
PL2002-01(A) targets the Garden Hill Field Trend, which is a
proven hydrocarbon bearing accumulation beneath the Port au Port
peninsula in Western Newfoundland. It is estimated, based upon
internal reservoir models, to contain between 83 and 341MMBO
in-place, increasing to between 136 and 591MMBO when considering
the mapped offshore extent. PL2002-01(A) covers an area of 16km(2)
and holds between 21 and 97MMBO of this total.
Initially discovered in 1994 with the PAP#1 well, the
conventional Lower Ordovician, Aguathuna Formation reservoir has
since been penetrated by three appraisal side-tracks, which support
the theory that reservoir productivity is linked to hydrothermal
alteration. Extensive testing at the Garden Hill Site observed a
lack of pressure depletion, indicating that a minimum connected
volume in excess of 100 million barrels of oil is present.
Pursuant to the Profit Sharing Agreement, the Company has a net
revenue sharing agreement with PVF whereby PVF will undertake, and
fund 100% of the costs of, operations on the PAP#1-ST#3 well, with
the aim of restoring production. The Company will receive 50% of
net revenue from production following PVF's recovery of costs
associated with their obligations under the agreement.
As announced on 16 August 2017 the lease was renewed for a
further five years and is now due to expire on 11 August 2022.
The Company
NU-Oil is a development and production company, which utilises
appropriate development approaches to create value from undeveloped
and mature oil and gas assets. NU-Oil is building a portfolio of
development and production assets with an emphasis on stranded and
marginal discoveries which can be unlocked using cost-effective
development solutions.
NU-Oil targets thoroughly appraised fields located in basins
with stable political and regulatory regimes. By doing so NU-Oil
minimises exposure to the risks associated with frontier plays,
particularly exploration and appraisal risks.
NU-Oil's 50% owned subsidiary, Marginal Field Development
Company Ltd. ("MFDevCo"), has developed offshore production
solutions that improve the economics of oil projects by
significantly lowering development costs compared to conventional
approaches. To implement its solutions, MFDevCo has established the
Marginal Field Delivery Consortium ("the Consortium"), a group of
leading global engineering specialists who provide the skills and
capability required to deliver projects. NU-Oil will utilise
MFDevCo solutions and the capability within the Consortium to
develop and deliver its projects.
Qualified Persons
The information in this release has been reviewed by Professor
Mike Bowman, a Non-Executive Director of NU-Oil and Gas plc.
Professor Bowman was the President of the Petroleum Exploration
Society of Great Britain in 2012 and has over 30 years' experience
in the petroleum industry.
Disclaimer
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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