TIDMUPL
RNS Number : 9211L
Upland Resources Limited
06 October 2016
06 October 2016
UPLAND RESOURCES LIMITED
("Upland" or the "Company")
Execution by DECC of Petroleum Exploration and Development
Licence 299
Upland (LSE:UPL), the oil and gas company actively building a
portfolio of attractive upstream assets, is pleased to announce
that the UK Oil and Gas Authority ("OGA") has today announced that
the Department of Energy & Climate Change ("DECC") has executed
Petroleum Exploration and Development Licence 299 ("PEDL299") in
respect of Block SK46c, following its award to the Company's
wholly-owned subsidiary, Upland Resources (UK Onshore) Limited
("Upland UK"), and its bid partners [as announced on 17 December
2015].
Block SK46c includes the Hardstoft oil field and the Hardstoft
East prospect, which were the focus of the original application by
Upland UK and its bid partners.
Highlights
-- Hardstoft is a low risk, low cost asset with a high
percentage chance of success (80% for the contingent resources and
64% for the prospective resources).
-- Upland UK is fully funded for its share of the costs of work
and supported by highly experienced and strong consortium
partners.
-- Hardstoft was the first oil discovery in the UK, first
drilled in 1919 and produced for 5 years. Upland believes that a
modern high-angle well in the Hardstoft structure could access
reserves over a much larger area than can have been seen by the
original wells.
-- Total Hardstoft resource net to Upland, based on the existing
Competent Person's Report prepared for the Company, is an estimated
1.6875 MMbbl.
Upland CEO, Steve Staley, commented:-
"Upland UK and its partners are delighted to have entered into
the Petroleum Exploration and Development Licence for Block SK46c.
This is an important and very positive step for the Upland Group's
ambitions to build a robust portfolio of high-impact assets -
especially when considering the lowered risk characteristics of the
Hardstoft asset and its low cost of development.
Oil first flowed at Hardstoft in 1919 and continued to do so
without producing any significant volume of water for five years.
At that time, the technology was limited to simple vertical wells
and it is likely that the wellbore produced oil only from the
matrix of the Carboniferous limestone reservoir. The Upland Board
believes that the bulk of the hydrocarbons here lie within natural,
semi-vertical fractures in the limestone which would likely not
have been crossed by the old wells. However, a new, semi-horizontal
well should cross these fractures and allow production from them as
well as the matrix in this conventional play. In addition, new
mapping of the Hardstoft structure indicates that the old wells
were probably not drilled on the crest of the structure; hence they
would only have accessed part of the oil column.
With a high degree of confidence in success and relatively low
costs, this is exactly the type of good risk:reward ratio asset
that the Upland Board was seeking as the first building block in a
robust portfolio. We look forward to working with our partners, who
bring impressive strength and experience to the team. The execution
of PEDL299 is the end result of extensive technical work by Upland
UK and its bid partners.
In addition to PEDL299, we have not been idle with regards to
our commitment to add other high impact, low-cost assets to our
portfolio. We are actively assessing a number of additional
attractive assets in the UK, North Africa and South-East Asia.
We look forward to updating shareholders as opportunities
develop."
PEDL 299
The confirmation of the execution by DECC of PEDL299 follows the
announcement on 17 December 2015 by the OGA of awards under the
14(th) UK Onshore Oil and Gas Licensing Round, including of the
award of PEDL299 in respect of Block SK46c in the East Midlands to
Upland UK, and its bid partners - Europa Oil & Gas Limited
("Europa Oil & Gas") and Shale Petroleum (UK) Limited ("Shale
Petroleum") and INEOS Upstream Limited ("INEOS") (as operator).
The initial term of PEDL299 is the period of 5 years beginning
with the start date (21 July 2016), with the second term being the
period of 5 years beginning with the day after the initial term
ends and the 'production period' being the period of 20 years
beginning with the day after the second term ends.
Block SK46c
The Hardstoft and Hardstoft East structures lie within Block
SK46c, which is one of the two blocks [originally] applied for by
Upland UK and its original bid partners, as referred to in the
Company's prospectus dated 15 October 2015 (the "Prospectus"), a
copy of which is available on the Company's website at
http://uplandres.com/investors/.
Block SK46c lies to the north west of Mansfield in the East
Midlands Petroleum Province. The emphasis is the rejuvenation of
the historic, conventional Hardstoft Oil Field in Block SK46c. This
potential was identified by Upland UK and the securing of a permit
over it was the primary objective of Upland UK's and its bid
partners' application.
The following table shows the participating interests for Upland
UK, Europa Oil & Gas, Shale Petroleum and INEOS in Block SK46c
both prior to and following the assignments of Shale Petroleum's
interest[/changes in interests] announced by the Company on 4
October 2016:-
Partner Prior Interest Proposed
Interests*
------------------ --------------- ------------
Upland UK 16.67% 25%
------------------ --------------- ------------
Europa Oil & Gas 16.66% 25%
------------------ --------------- ------------
Shale Petroleum 16.66% -
------------------ --------------- ------------
INEOS (Operator) 50.00% 50%
------------------ --------------- ------------
*Subject to approval by the Oil & Gas Authority
Note that the above table represents interests in the
conventional prospectivity of PEDL299. INEOS has 100% of the
interest in the unconventional prospectivity.
Reflecting the differing exploration emphases of the partners,
the interests as per the table apply to all oil & gas plays in
Block SK46c below the top of the Dinantian Limestone and all
hydrocarbon accumulations that are part of the same hydrocarbon
column above it, these being 'conventional' hydrocarbon plays.
INEOS has the rights and obligations relating to the other,
primarily unconventional, oil & gas plays ('shale gas' and
'shale oil', typically requiring fracking) above the Dinantian
Limestone in Block SK46c. The Hardstoft accumulation is part of the
deeper zone in which Upland UK has its 25% equity interest.
An independent Competent Person's Report dated 16 September 2015
and contained in Part XV of the Prospectus ("CPR") prepared by
Blackwatch Petroleum Services Limited ("Blackwatch") for Upland
estimates there to be 3.10 MMbbl of contingent recoverable resource
in Hardstoft plus 3.65 MMbbl prospective resource in Hardstoft East
(making a total of 6.75 MMbbl resource), all sitting in Block SK46c
and on a 'best' or 'central case' basis. Total resource net to
Upland UK, based on Blackwatch's CPR, is estimated at 1.6875 MMbbl.
Within the CPR, Blackwatch estimates the chance of success for the
contingent resource at 80% and 64% for the prospective resource.
Due to its potential to be value accretive at an oil price below
US$30 per barrel, the Company considers the Hardstoft structures to
be economically robust and valuable assets.
About our partners
Europa Oil & Gas Limited is a wholly owned subsidiary of
AIM-listed Europa Oil & Gas (Holdings) plc (which also acquired
Shale Petroleum (UK) Limited earlier this year) and is an
experienced and successful operator onshore UK.
www.europaoil.com
INEOS Upstream Limited is a wholly owned subsidiary of Ineos
Group Limited, a global manufacturer of petrochemicals, speciality
chemicals & oil products with sales of US$40 billion in 2016
and operations in 67 countries. www.ineos.com
*Ends*
Upland Resources Limited www.uplandres.com
============================ =========================================================
Steve Staley, CEO Tel: 07891 677 441
s.staley@uplandres.com
============================ =========================================================
Optiva Securities Limited
============================ =========================================================
Jeremy King (Corporate Tel: 020 3137 1904
Finance) jeremy.king@optivasecurities.com
============================ =========================================================
Christian Dennis (Corporate Tel: 020 3411 1882 christian.dennis@optivasecurities.com
Broker)
============================ =========================================================
FlowComms Ltd www.flowcomms.com
============================ =========================================================
Sasha Sethi (Investor Tel: 07891 677 441
Relations) sasha@flowcomms.com
============================ =========================================================
Notes
Upland is an upstream oil & gas company whose highly
experienced management has a track record of creating major value
for shareholders in junior oil & gas companies, including Cove
Energy plc. The Company has extensive technical and commercial
skills and contacts, management having held senior roles in
Petronas, Conoco, Shell etc. Upland is taking advantage of these,
its recent successful IPO (ticker UPL.L) & fundraising and the
low oil price to acquire quality upstream assets on attractive
terms.
The company news service from the London Stock Exchange
END
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