Farm in to UKCS Block 211/22a NW and Kerloch Discovery
22 November 2007 - 12:19PM
UK Regulatory
22 November 2007
Granby Oil and Gas plc
("Granby" or "the Company" or "the Group")
Farm in to UKCS Block 211/22a NW and Kerloch Discovery
Highlights:
� Acquisition of 10% interest in Kerloch area of block 211/22a North West
� Appraisal well currently drilling
Granby Oil and Gas plc, the oil and gas exploration and production company with interests in the
UK North Sea and onshore Europe, is pleased to announce that it has executed a Farm-In Agreement
to participate with a 10% interest in UK North Sea Licence P.201 Block 211/22a NW, which contains
the Kerloch oil discovery.
The field was discovered in 1976 by well 211/22-1. The new appraisal well which commenced
drilling on 21st November into an adjacent fault block is expected to take 30 days to drill.
Under the agreed terms, to earn a 10% participating interest from First Oil Expro Limited, Granby
will fund 15% of the costs of drilling and testing the well up to a 100% gross expenditure capped
at �14 million. For expenditure above the �14 million cap, Granby will contribute costs in
accordance with its 10% participating interest.
The assignment of interests is subject to approval of the Secretary of State for the Department of
Business, Enterprise and Regulatory Reform (DBERR) to the assignment of Licence interests to
Granby.
David Grassick, Managing Director of Granby Oil and Gas, said:
"We are pleased to participate in the appraisal of the Kerloch discovery, which is in line with
our strategy to acquire other appraisal and development opportunities in the North Sea and other
areas of interest."
Bob Moore, Commercial Director of Granby Oil & Gas, said:
"Following the sale of Galoc, Granby is now able to recycle some of the funds into other appraisal
and development projects such as Kerloch and Monkwell."
Enquiries:
Granby Oil and Gas plc 020 7648 4950 or
0845 2577537
David Grassick, Managing Director 07785 921080
Nigel Burton, Finance Director 077 8523 4447
www.granbyoil.com
KBC Peel Hunt (Nominated Adviser) 020 7418 8900
Jonathan Marren / Matt Goode
College Hill 020 7457 2020
Nick Elwes / Paddy Blewer
Notes to Editors
Overview of the Business
Granby Oil and Gas plc (LSE symbol GOIL) is building a significant oil and gas exploration,
development and production portfolio in carefully selected areas of the North Sea and elsewhere
through technical and commercial innovation.
Granby's Portfolio and Plans
Granby owns a 54% participating interest in, and is production operator of, the Tristan North West
gas development in block 49/29b in the UK Southern North Sea. Mitsubishi Corporation, which has
provided a loan facility agreement for the development, and Mosaic Natural Resources are co-
venturers in the project. The first phase of subsea development operations has been completed
with the flowline and control umbilical installed, hydro-tested and trenched. Drilling operations
for the single subsea development well have commenced. First gas is expected in early 2008.
Granby has a 9% interest in the Monkwell gas field in UKCS Licence P.001, Block 42/29a. The field
was discovered in 1989 by well 42/29-6, which produced gas at a rate of 26.8mmcfd from the Lower
Leman Sandstone. The field was appraised by two further wells which also tested gas. A new well
is planned for 2008 to further appraise the field and to enable a development decision to be made.
Granby also announced on 29 October the sale of its 9.14% indirect interest in the Galoc oil
field, offshore Philippines, to Otto Energy Ltd. The total cash consideration payable to Granby is
USD $25.5 million, comprising US$16.66 million payable at Completion, repayment of existing
Shareholder Loan amounts to GPC of approximately US$2.59 million, and repayment of the
approximately US$6.3 million deposit held in escrow with Banca Intesa as security for the project
financing. In addition, Otto will issue to Granby one million shares in Otto (to be held in escrow
for a period of 12 months) and four million options at an exercise price of 34 cents per share (to
be held in escrow for a period of 12 months) and which lapse if not exercised within 24 months
from their issue. At the completion of the transaction, and allowing for the costs of the Kerloch
appraisal well, Granby is expected to have approximately �15 million of cash available to fund
further growth of the business.
Granby's current exploration acreage comprises interests in a portfolio of offshore licences in
the North Sea, containing multiple prospects generated by the Company. Granby also has an
interest in a single onshore licence in Yorkshire where an exploration well commenced drilling on
15 November 2007.
Granby also has a 50% working interest in two blocks, one of which contains discovered oil and
gas, located in the gas prolific Northern Rotliegendes sub-basin onshore Poland.
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