Advance Energy plc, the energy company seeking growth through acquisition or farm-in to non-operated interests in discovered upstream projects, is pleased to provide the following operations update.
Southern North Sea
As announced on 4 September 2020, the Company's wholly owned subsidiary Resolute Oil & Gas (UK) Limited ("Resolute") and Holywell Resources Limited ("Holywell"), a company in which Advance Energy has a 25% interest, have each been awarded, subject to documentation, a 50% working interest in block 43/25 and part-blocks 43/29, 43/30, 48/4 and 48/5 in the Oil & Gas Authority's ("OGA") 32nd Offshore Licensing Round.
Block 43/25 holds part of the Opal gas discovery with a 2C resource of the order of 100 Bscf. The part-blocks 43/29, 43/30, 48/4 and 48/5 contain the well-established undrilled Badger gas prospect. All five blocks are located in the Southern North Sea with Holywell as the Operator. Accordingly, Advance Energy will hold a non-operated, indirect 62.5% interest in the blocks. The Company will, whilst waiting for the formal documentation from the OGA confirming the license awards, review the technical information available on the blocks and seek to agree the next steps with Holywell; further updates will be provided as this process progresses.
Offshore P1918 Colter & Colter South Licence
The Company's wholly owned subsidiary Resolute holds an 8% non-operated working interest in the P1918 Licence. Further to the completion of an appraisal drilling programme in 2019 the Operator of the licence, Corallian Energy Limited ("Corallian"), has completed an evaluation of the P1918 Licence and has recently recommended to the joint venture that the licence not be renewed when the second term expires on 31 January 2021 based on the conclusion that the Colter South discovery could not be commercially developed. Advance Energy agrees with the Operator's recommendation.
Onshore PEDL 330 & 345 Licences
The Company's wholly owned subsidiary Resolute holds an 8% non-operated interest in the PEDL 330 & 345 Licences. Corallian, the Operator of the licences, is awaiting receipt of third party 3D in order to assist with the evaluation of the prospectivity of the PEDL 330 & 345 Licences. The first term of the PEDL 330 & 345 Licences expires on 20 July 2021 unless the joint venture commits to drilling a well by this date.
Advance Energy entered into an Operating Services & Option Agreement ("Service Agreement") with PT Petroenim Betun-Selo, the operator of the Betun-Selo KSO in Sumatra, Indonesia in 2015. The Company has met its obligations under the Service Agreement.
The production performance of the four worked-over wells after April 2020 means that the Company did not realise any incremental production from the Service Agreement beyond that date.
The Company views the Betun-Selo KSO as non-core and not in line with the Company's forward strategy, and accordingly the Company is considering its forward options in relation to the Service Agreement and will provide a further update in due course.
The Betun-Selo KSO and P1918 Licence are capitalised on the Company's balance sheet at $604,000 and $267,000 respectively as at 31 October 2019, the last balance sheet date.
Further to the relaunch of the Company and completion of its strategic review in March 2020, the Company continues to progress a number of new venture opportunities. Whilst it is yet to agree commercial terms in respect of such opportunities, the Board is encouraged by its initial due diligence and the multiple, positive funding discussions it has initiated. This is in line with its focus on leveraging the deep industry experience and network of the management team to identify and unlock hidden value in discovered upstream projects that meet with the Company's required acquisition or farm-in criteria, and build a portfolio of non-operated positions generating at least 20 thousand barrels of oil equivalent per day net production by mid-decade, or earlier.
Leslie Peterkin, CEO of Advance Energy, commented:
"As Advance Energy continues its transition underpinned by the strategic pillars identified earlier this year, we continue to manage our existing portfolio appropriately.
The recent licence awards in the Southern North Sea resulted from an application made prior to the inception of Advance Energy, and we will fully review their potential in order to maximise value for our shareholders. Importantly, on other fronts, we continue to actively screen a number of investment opportunities that are fully consistent with our strategy and are most encouraged by the progress we are making in that regard."