Angus Energy announces agreement to acquire a 25 percent interest in the Balcombe Licence (PEDL244)

 

 

 

Angus Energy announces agreement to acquire a 25 percent interest in the Balcombe Licence (PEDL244)

Angus Energy, a conventional oil and gas production and development company, has entered into a definitive agreement to form a new partnership with Cuadrilla Balcombe (‘Cuadrilla’) and Lucas Bolney (‘Lucas’). Subject to satisfaction of the terms of the agreement, the Company will join the partnership through the acquisition of a 25.0% interest in licence PEDL244 which includes the entire Balcombe field discovery.

 

On behalf of the partnership, Angus Energy will, subject to Oil and Gas Authority (‘OGA’) approval, assume Operatorship of the Balcombe licence. The Company will commence a fully approved well test program of the Balcombe-2Z horizontal well at the earliest opportunity. Angus Energy will also establish a local Community Liaison Group and contact local residents, at the appropriate time, before work commences.

Under the terms of the agreement, Angus Energy will pay a cash amount in two parts as set out below along with the costs of the well test program of Balcombe-2Z. If the results of the well test are determined successful, the Company will assume the associated costs of a Field Development Plan (‘FDP’) submission to the Oil & Gas Authority (‘OGA’).

The Acquisition has been unanimously approved by the Board and will require additional sources of capital. Accordingly the Board is reviewing several financing options and is in the final stages of selection. An update will be provided in due course.

All operations at Balcombe will be performed through conventional production. There will be no hydraulic fracturing or ‘fracking’.

Terms of the Acquisition

Under the terms of the Acquisition, Angus Energy Weald Basin No.3 Limited, a wholly owned subsidiary of Angus Energy, has conditionally agreed to acquire the 25% interest in PEDL244 on a pro-rata basis from Cuadrilla and Lucas (the Sellers) on the following terms. The current ownership of PEDL244 is 75% Cuadrilla and 25% Lucas:

  • Pay within 20 working days of 20 January 2018 £2,000,000 less £150,000 already paid under a confidentiality agreement with the Sellers;
  • Pay £2,000,000 following consent from the OGA for the Acquisition; and
  • Carry out and pay for the well test of a horizontal well test program of the Balcombe-2Z (the “Well”) to achieve the following objectives:
    • Measure the Well flowing production rates for oil and natural gas;
    • Measure flowing bottom hole and wellhead Well pressures;
    • Determine the gas oil ratio (GOR) of production from the Well;
    • Collect and analyse Well oil, gas and water samples; and
    • Measure and record Well shut-in bottom hole pressure over approximately one month.

Should the OGA not approve the Acquisition, the initial £2.0 million payment is refundable.

The Company notes a fully approved test program of Balcombe-2Z Well will require minimal preparation as the Well is drilled and ready for testing.

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