TIDMCZN
RNS Number : 0347L
Curzon Energy PLC
20 December 2018
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Curzon Energy Plc
("Curzon" or the "Company")
Operations Update
20 December 2018
Curzon Energy plc (LON:CZN) the London Stock Exchange listed oil
and gas development company, pursuing a targeted acquisition
strategy of oil and gas appraisal and development assets, announces
an operations update on its Coos Bay Coal Bed Methane ("CBM")
project.
Highlights
-- Well testing operations at Coos Bay suspended
-- Curzon to undertake a comprehensive review of Coos Bay
strategy to determine optimum forward plan
-- Considering attracting a suitably qualified joint venture partner
-- Ultimate commerciality of the project requires additional appraisal drilling and testing
-- Project with Pared Energy, LLC ("Pared Energy") offers
potential participation in the drilling and development of a
multi-TCF onshore natural gas project in Texas
-- Negotiations with Pared Energy have commenced and are proceeding constructively
Scott Kaintz, Chief Executive Officer comments:
"While gas flow at Coos Bay has not been in line with
expectations, following the 2018 workover program, we remain
bullish that the real potential of Coos Bay has yet to be
adequately tested, fully explored or definitively determined. Not
having drilled new wells over the past year has meant that the
technical data gained on the project since IPO has been limited and
should not be considered decisive or representative of actual field
commerciality.
"Ultimately, to take the field forward will demand a dedicated
appraisal and drilling program conducted by Curzon alongside
potential development partners, and designed not only to discover
the true commerciality of the known gas deposits, but also to
establish a replicable well template for scalable development.
Unfortunately, as Curzon inherited the existing wells and pad
locations from the previous operator, we could not design an
optimal appraisal program around them nor verify how exactly they
were drilled and completed and so have now completed the workover
and test program that was undertaken during 2017-18.
"As such, the Board feels that to expend further funds and
management resources on testing the existing wells was unlikely to
yield meaningful results in the short term, and that a more
sensible course of action would be to step back briefly to consider
the best way forward at Coos Bay.
"This decision on Coos Bay gives us the needed bandwidth to work
towards completion of our agreements with Pared Energy on the
potential multi-TCF Texas gas deal recently announced, while
offering the chance to look at Coos Bay with a fresh top-down
technical and commercial perspective. A potential next step
includes looking to attract a suitably qualified joint venture
partner to help fund the next stage of appraisal drilling activity
and testing at Coos Bay with the objective of confirming the
ultimate commerciality of the project.
"Meanwhile, our negotiations with Pared Energy are proceeding
constructively and we look to update the market with final
commercial details in the near term."
Operations Update
Coos Bay Energy - Coal Bed Methane Project
Following an internal review of the Company's 100% owned Coos
Bay Energy CBM project, the Company has decided to suspend well
testing operations at Coos Bay in order to focus its available
resources on coming to commercial terms with Pared Energy regarding
its Texas gas project.
Results from recent well flow rate tests have been interpreted
as inconclusive, and the Board believes that the ultimate
commerciality of the project has yet to be adequately tested, fully
explored or definitively determined.
The Board is of the view that the basic investment thesis that
underpinned the 2017 IPO, still holds today. The primary aspects of
Coos Bay CBM project are listed below:
Coos Bay Coal Bed Methane Project Highlights:
o 45,000+ acres of known gas bearing coals
o 1 TCF of gas in place and 273 BCF of 2C resource
o 12 historic wells with 5 tested in 2017-18
o Over 400 potential well locations
o 12 inch regional pipeline crosses the property
o Low royalty rates
o $38 million + historic spend
o Multi-year natural gas price premium to Henry Hub
o Regional LNG terminal planned
o 10 distinct coal seams with net thickness of 70+ feet
o Average permeability of 6 millidarcies
o Inexpensive well drilling and development costs
Coos Bay - Original Gas in Place Estimates (BCF)
Case Low Mid High
---------- ---------- ---------
Upper Coaledo 20.6 66.2 101.5
---------- ---------- ---------
Lower Coaledo 181.3 579.4 888.5
---------- ---------- ---------
Total 201.9 645.5 989.9
---------- ---------- ---------
Coos Bay - Lower Coals - Contingent Resources (BCF)
Category 1C 2C 3C
---------- ---------- ---------
85.6 273.5 419.4
---------- ---------- ---------
Considering the advantages and despite the lack of progress over
the last year on site, the Board believes that the original vision
of conducting appraisal drilling at Coos Bay and proving the
commerciality of new CBM wells, remains both sensible and
potentially economically attractive.
The Company intends to conduct a period of assessment of its
strategy at Coos Bay with a view to determining the most effective
route forward and will provide further updates as this review
process proceeds.
A potential future next step includes looking to attract a
suitably qualified joint venture partner to help fund the next
stage of appraisal drilling activity and testing at Coos Bay with
the objective of confirming the ultimate commerciality of the
project.
Pared Energy - Multi-TCF onshore natural gas project in
Texas
Negotiations with Pared Energy continue following the Memorandum
of Understanding first announced on 21 November 2018. Meetings were
held over the past weeks in the United States between
representatives of Pared Energy and Curzon, and substantial
progress was made on agreements on funding and development, and
investment terms.
For further information please contact:
Curzon Energy Plc +44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Richard Hail
Richard Redmayne
Optiva Securities Limited +44 (0) 20 3137 1902
Christian Dennis
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END
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