Nu-Oil and Gas PLC Update - PL2002-01(A) Farm-In Agreement (9864W)
August 07 2018 - 2:00AM
UK Regulatory
TIDMNUOG
RNS Number : 9864W
Nu-Oil and Gas PLC
07 August 2018
7 August 2018
Nu-Oil and Gas plc
("Nu-Oil" or "the Company")
Update - PL2002-01(A) Farm-In Agreement
Further to the Company's announcement on 24 May 2018, the
Company provides an update on discussions between Enegi Oil Inc.
("Enegi") and PVF Energy Services Inc. ("PVF") on the farm-in by
PVF to Production Lease 2002-01(A) ("PL2002-01(A)"), in which the
Company's wholly-owned subsidiary, Enegi, holds a 100% working
interest. The PL2002-01(A) lease area lies over the Garden Hill
field.
Discussions continue between the parties in respect of entering
into a definitive farm-in agreement, which will fund the next phase
of development and optimise the operational and ownership structure
for the longer-term success of the project. Negotiations have
identified opportunities to create local infrastructure which, in
the long run, is expected to reduce costs and minimise disruption
caused by the lack of a local supply chain; incorporating this may
require a broader and more complex agreement perhaps incorporating
further entities.
The Company is encouraged by the progress made to date with PVF
and other parties, in particular the ambition to develop wider
opportunities in the region. Enegi is working to conclude a farm-in
agreement as a priority and will update the market as and when
appropriate.
For the avoidance of doubt, all parties remain fully committed
to restoring production from the PAP#1-ST#3 well and ongoing
operations are not affected by these discussions.
Alan Minty, Chairman of Nu-Oil, commented:
"We believe that building infrastructure at and around Garden
Hill with strategic partners makes this the cornerstone project
that unlocks more opportunities for Enegi in the region; we are
considering the farm-in agreement in this wider context. Thus, we
would use a consortium model to develop onshore assets in western
Newfoundland mirroring the Company's offshore marginal field
initiative.
"We have chosen to explore this because the successful
implementation of such an approach would reduce costs and
potentially amend farm-in terms for the benefit of the
Company."
Enquiries
Nu-Oil and Gas plc
Simon Bygrave Tel: +44 (0)161 817 7460
Investor Relations & Communications
Nigel Burton Tel: +44 (0)7785 234 447
Chief Executive Officer
Strand Hanson Limited Tel: +44 (0)20 7409 3494
Rory Murphy/Ritchie Balmer/Jack
Botros
Novum Securities Limited Tel: +44 (0) 20 7399 9425
Jon Bellis
Notes
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.
Enegi Oil Inc.
Enegi Oil Inc., the Company's wholly owned subsidiary, is a
private limited company registered in Canada through which the
Company manages its Newfoundland assets. Enegi Oil Inc. owns 100%
of Production Lease 2002-01(A) and Exploration Licence 1070.
PL2002-01 (A)
PL2002-01(A) lies over 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 Production 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.
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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