Page 11 - EurOil Week 47

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PGNiG:weareaccelerating work on the Ærfugl field
The development of the field in the Norwegian Sea enters the second phase.
An additional three production wells will be drilled next year. This means that starting from 2020 the extraction of natural gas from the Ærfugl deposit will be greater.
“All partners on this license want to
start production from this field as soon
as possible. So we are pleased that we will implement some part of the plan sooner. Economically, Ærfugl is one of the most attractive deposits on the Norwegian Continental Shelf. As stated by its operator, the so-called break-even here is $15 per barrel of oil equivalent. This means that it is profitable to extract gas from Ærfugl as long as the price per barrel of oil is above $15,” commented Piotr Wozniak, president of the PGNiG management board.
The deposit development plan has been divided into two phases – three wells will be made in each of them. Production start from the first three wells is planned for the fourth quarter of 2020.
Production from the first borehole in
the second phase should also start in 2020. Acceleration of work became possible due to the technical increase in the capacity of the FPSO Skarv (floating production and storage unit) to which the Ærfugl field is connected. Earlier, due to its limited capacity, completion of the second phase of deposit development was planned for 2023.
Ærfugl (formerly: Snadd) is a gas- condensate field extending over a length of 60 km and a width of 2-3 km. Its recoverable reserves are estimated at 274.7 million barrels of oil equivalent. According to the assumptions, PGNiG’s output from this field in the peak production year will be about 0.5 bcm of natural gas.
PGNiG Upstream Norway uses new technical solutions to develop Ærfugl. The filed will be developed with 2 new technologies.
The first will be electrical trace and heating of the pipe-in-pipe required to prevent risk of gas hydration during transport to Skarv FPSO located up to 21 kilometers away from the wells. The second solution will be the world’s first 7” Vertical Xmas Trees which are required due to expected high flowrates.
PGNIG, November 20, 2019
Memorandum of Grant of licence extensions: understandingforpotential P1929andP2304
acquisition of assets in Ukraine
Regal Petroleum, the AIM-quoted oil and gas exploration and production group, is pleased to announce that it has entered into a memorandum of understanding for the acquisition of PJSC Science and Production Concern Ukrnaftinvest (UNI), which
holds the Belolisky and Alibeysk-Trapivska production licences in Ukraine.
The memorandum is made between (1) the company and (2) Ms Lidiia Chernysh
and Bolaso Investments, who each own
50% of the issued share capital of UNI.
The memorandum is non-binding (save in respect of certain provisions) but sets out proposals for the Company to acquire 100% of the issued share capital of UNI for a total consideration of up to $40 million, subject
to satisfaction of certain conditions and contingencies, comprising: (i) $9mn payable on completion; (ii) $1 million payable on satisfaction of certain conditions; and (iii) an amount equal to 25% of the net present value (using a 10% discount rate), payable in cash or, by mutual agreement, ordinary shares of the Company, of the proved (1P) reserves attributable to the Licences as assessed by
an independent reserves assessor following completion of a work programme, subject to a cap of $30mn. The Company will pledge a 25% shareholding interest in UNI in favour
of the Sellers as security for the payment referred to in (iii) above, and in the event
that this payment is not made, the pledged shares will be transferred back to the Sellers in full settlement. A deposit of $0.5 million
is payable under the Memorandum, which
is to be offset against the first consideration payment at completion, or refundable if the Acquisition does not proceed. The respective obligations of the Sellers will be guaranteed by Mr Vladimir Chernysh (in respect of Ms Lidiia Chernysh) and Mr Leonid Kozachenko (in respect of Bolaso Investments Limited), who is the ultimate beneficial owner of Bolaso Investments Limited.
Under the terms of the memorandum, the acquisition is conditional on and subject to completion of the company’s due diligence enquiries, certain conditions precedent and the parties entering into detailed transaction documentation, which will contain terms, conditions, warranties and indemnities which are customary for this type of transaction. REGAL PETROLEUM, November 26, 2019
Egdon Resources is pleased to advise that the Oil and Gas Authority (OGA) has granted licence extensions to UK offshore licences P1929 and P2304. Egdon’s subsidiary, Egdon Resources UK (ERUK), is the operator and currently holds a 100% interest in both licences.
The OGA has granted a six month extension to both P1929 and P2304 to May 31, 2020 with obligations as follows:
By January 31, 2020, demonstrate to the OGA’s satisfaction that a farm-in agreement has been fully executed which provides for funding of the licence work programme; and, by March 31, 2020, demonstrate to the OGA’s satisfaction that the licensee is on track to deliver a future programme of 3D seismic data acquisition across both licences.
We anticipate further engagement with the OGA during the period of the licence extension to agree the nature and timing of the forward work programme and to reach agreement on the duration of a further licence extension to accommodate these activities.
P1929 contains the Resolution gas discovery where a competent persons report by Schlumberger Oilfield UK (April 2019) reported estimates of mean contingent
gas resources of 231 billion cubic feet of
gas (bcf) with a P90 to P10 range of 100
to 389 bcf, attributable to the Zechstein reservoir in the 1966 gas discovery made
by Total in well 41/18-2. P2304 contains
an extension of the Resolution discovery and the Endeavour gas discovery which Egdon estimates contains mean Contingent Resources of 18 bcf, with a P90 to P10 range of 10 to 28 bcf.
Today’s news follows from our announcement of 4 November 2019, advising that ERUK had signed an exclusivity agreement in respect of Licence P1929 and P2304 with a large internationally recognised exploration and production company.
Despite entry into the agreement, no assurance can be provided that a commercial transaction will ultimately be concluded with the counterparty. The company will provide further updates in respect of these matters in due course.
EGDON RESOURCES, November 27, 2019
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