TIDMALBA
RNS Number : 6960G
Alba Mineral Resources PLC
09 August 2016
Alba Mineral Resources Plc
("Alba" or the "Company")
Brockham Cash Call Paid, Drilling Scheduled to Commence by Year
End
Highlights
-- Alba has exercised option to acquire 5 per cent interest in
Brockham oil field and has paid cash call for site upgrades prior
to drilling
-- Drilling of side-track well expected by end of this year with
the purpose of re-commencing production at Brockham
-- Alba's interest in Brockham complements and strengthens its
existing oil and gas portfolio, comprising a 15 per cent interest
in Horse Hill Developments Limited
-- Alba is the only AIM-quoted participant in the Brockham oil field
Alba is pleased to announce that, having exercised its option to
earn a five per cent interest in UK Petroleum Production Licence
235 (PL235), it has paid its share of the cost of the first cash
call issued by the Operator, Angus Energy Weald Basin No.3 Limited,
in respect of the proposed drilling of a side track well at
Brockham. The cash call issued relates to the costs required to
effect certain required upgrades to the surface facilities at the
Brockham site. Subject to the receipt of regulatory approvals, the
Operator has informed the Company that it expects to commence
drilling by the end of this year.
Alba originally secured this option to earn a five per cent
interest in Brockham as part of its acquisition from Angus Energy
in October 2015 of a 5 per cent interest in Horse Hill Developments
Limited, the 65 per cent owner of the Horse Hill oil and gas
project (PEDLs 137 and 246). Alba's earn in to Brockham was
originally agreed to be on a "two for one" promote basis, whereby
Alba would pay a ten per cent contribution to the cost of the
drilling of the side-track well (from spudding to first oil) in
order to earn its 5 per cent interest. Alba has now agreed with
Angus that Alba's contribution to the cost of the side track well
from spudding to first oil shall be capped, for all dry hole costs,
at a maximum of GBP187,125, plus a maximum of a further 10 per cent
of the AFE (Agreement For Expenditure) to be issued for
production/well testing, and Alba shall only be required to fund
Brockham joint account costs incurred and cash called thereafter in
accordance with its five per cent interest only, and no higher
The Company considers this entry cost to a fully developed and
recently producing oilfield to be modest, not least since Alba is
able to commence its participation in Brockham on the cusp of an
exciting development, namely the drilling of a side-track well via
which the Operator expects to be able to recommence production at
Brockham.
About the Brockham Oil Field
Brockham Production Licence 235 was originally granted in 1983
and is located in the Weald Basin in Surrey, just a few miles from
Alba's other significant oil and gas interests at Horse Hill. The
Brockham oil field was discovered by BP through well Brockham-X1 in
1987 and initially flowed 95 barrels of oil per day (bopd) of 27.5
degree API crude from the Portland sands reservoir. Since then
three further wells and several side-tracks have been drilled. The
Operator, Angus Energy, which acquired the field in July 2011, is
planning to drill a further side-track into the crest of the
reservoir, targeting the Portland Sandstone, Corralian Sandstone
and Kimmeridge Limestones, with a view to re-commencing production
at Brockham at improved flow rates.
A Competent Person's Report encompassing Brockham was
commissioned by the Operator, Angus Energy, from Xodus Group in
2015. The most recent independent assessment performed on the
Brockham Oil Field was announced in March 2014, being a report
produced and prepared by RPS Energy, an independent consultancy
specialising in petroleum reservoir evaluation and economic
analysis. The estimate made by RPS in respect of volumes of
hydrocarbons initially in place in the Brockham field as at 31
December 2013 is as follows:
(MMstb) Gross Alba Interest
---------- ---------------------- ----------------------
Low Best High Low Best High
---------- ------ ------ ------ ------ ------ ------
(P90) (P50) (P10) (P90) (P50) (P10)
---------- ------ ------ ------ ------ ------ ------
Brockham 1.89 3.62 5.83 0.09 0.18 0.29
---------- ------ ------ ------ ------ ------ ------
The estimate made by RPS in respect of the reserves in place in
the Brockham field as of 31 December 2013 is as follows:
(Mstb) Gross Alba Interest
---------- -------------------- -------------------
1P* 2P 3P 1P* 2P 3P
---------- ----- ----- ------ ----- ----- -----
Brockham 17.9 47.0 101.5 0.90 2.35 5.08
---------- ----- ----- ------ ----- ----- -----
* The 1P case has been truncated to the anticipated Licence
expiry as published by DECC of 27 October 2017.
The other participants in PL235 are Angus Energy (operator, 60%,
reducing to 55% due to Alba's earn in), Terrain Energy Limited
(20%), Doriemus Plc (10%) and Brockham Capital Limited (10%). As
such, Alba is the only AIM-quoted participant in the Brockham oil
field.
Mike Nott, Alba CEO, commented:
"The opportunity to invest and maintain an interest in the
Brockham onshore oil field project represents a significant bolt-on
addition to Alba's interests in the Weald Onshore Oil
Province."
"The oil field at Brockham is well documented and the
information is in the public domain. The field was discovered by
British Petroleum (BP) in 1987. Production was suspended in January
of this year pending site upgrades and relevant approvals for the
drilling of a production side-track well."
"Investing in a side-track well at this known discovery offers
Alba the immediate opportunity to be a partner in what the Operator
expects to be increased production flows from the Brockham oil
field. Technically side track wells usually offer the opportunity
to give multiples of historic production."
"The next six to nine months will be an exciting period in
Alba's development as we pursue this and our other mineral and oil
project opportunities. We hope and expect to offer shareholders
increased news-flow over this period."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Change of Registered Office
Alba's registered office has changed to 6th Floor, 60
Gracechurch Street, London EC3V 0HR.
For further information please contact:
Alba Mineral Resources
plc +44 (0) 207 264 4366
Michael Nott, CEO
Nominated Adviser +44 (0) 20 7148 7900
Cairn Financial Advisers
LLP
James Caithie / Liam
Murray
Broker +44 (0) 1293 517 744
Dowgate Capital Stockbrokers
Limited
Jason Robertson / Neil
Badger
About ALBA
Alba holds a 15 per cent interest in Horse Hill Developments
Limited, the company which has a 65 per cent participating interest
and operatorship of the Horse Hill oil and gas project (licences
PEDL 137 and PEDL 246) in the UK Weald Basin.
Alba also has exercised an option to farm into 5% of Production
Licence 235, which comprises the producing onshore Brockham Oil
Field.
Alba has the right to earn up to 70 per cent of the Amitsoq
Graphite Project in Southern Greenland.
In addition, the Company has recently renewed its base metal and
gold licence in the Republic of Ireland, and has applied for the
reissue of a uranium permit in northern Mauritania. The new
Mauritanian permit will be on a reduced area, and is centred on
known uranium-bearing showings.
Alba continues actively to review and discuss other project
opportunities which have value enhancing potential for the Company
whether by acquisition, farm in or joint venture in a range of
jurisdictions around the world.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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