Drilling Report
17 März 2008 - 9:21AM
UK Regulatory
17 March 2008
Granby Oil and Gas plc
("Granby" or "the Company" or "the Group")
Tristan NW Gas Development Update
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 provide an update on the Granby operated Tristan NW
development in the UK Southern North Sea.
As previously announced on 28 February 2008, the 49/29b-11 well has been successfully tested, and
the Ensco 80 rig was preparing to move off location. The rig move was subsequently delayed by
adverse sea and weather conditions but departed the well location and went off contract 17.52 on
Friday 14 March 2008.
The Acergy operated Diving Support Vessel 'Osprey' arrived at the Davy platform location and
commenced diving operations required for the tie-in of the Tristan NW flowline and control
umbilical on 8 March 2008.
First gas is still expected to be in April 2008, although progress remains dependent on the
weather and sea conditions for the outstanding diving and tie-in operations.
The extended delays, together with those resulting from equipment failures during the drilling of
the well, have resulted in an increase in project costs. As a result, Granby expects to contribute
a further �4.0 million towards the project, in addition to the �6.0 million indicated on 28
January 2008 as already contributed or committed. The Board believes that the net present value
(NPV10) of Granby's 54% interest in the project following this additional contribution is
currently estimated to be approximately �14.2 million, after allowing for the effect of the
additional expenditure, the results of the well test and current market gas price projections.
After allowing for these additional costs, Granby expects to end the current financial year on 31
March with approximately �7.3 million of uncommitted cash.
However, the additional costs of the Tristan NW project have exceeded the funding available to the
smaller partner in the project and so it is probable that Granby will be required to fund
approximately �1.9m of costs on the partner's behalf in return for which Granby would acquire an
additional 10.3% interest in the project for no additional consideration. Whilst this would have a
positive overall impact on the value of the Tristan NW development to Granby, it would also reduce
the amount of cash available to the remainder of the business and therefore impact on Granby's
work programme prior to the arrival of significant revenues from Tristan NW from early 2009.
David Grassick, Managing Director of Granby Oil & Gas plc, said
"We are pleased that the Acergy Osprey has arrived on location on schedule to begin the tie-in
work and we look forward to our first production from the Tristan NW field shortly after that work
is completed."
The Directors can confirm that this announcement has been reviewed by David Grassick MA (Cantab)
and member of SPE, who has over 27 years of experience as a Petroleum Engineer within the oil
industry.
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 020 7418 8900
(Nominated Adviser and Broker)
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 operated Tristan NW gas development due on stream April 2008
* Three UKCS wells drilling in 2008, including the Monkwell appraisal well and Globe
exploration well
* Exploration portfolio with net unrisked P50 potential of 321 million barrels
Granby's Portfolio and Plans
In additional to the recent Kerloch discovery, Granby's current activity includes a 54% interest
in the Granby operated Tristan North West gas development in block 49/29b in the UK Southern North
Sea, which is expected to begin production in April 2008.
In 2008 Granby expects to drill at least three further wells, including a fully funded exploration
well on UKCS block 9/22 in which Granby has a 25% carried interest and the appraisal of the
Monkwell gas field.
Granby has a 20% 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 26.8mmscfd 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'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 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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