The company behind the Brockham oil well in Surrey has bought into the neighbouring licence where there are plans for exploratory drilling this year.
Angus Energy announced today it had taken a 12.5% stake in PEDL143. The licence includes the Holmwood Prospect and the proposed oil well at Bury Hill Wood, near Leith Hill.
According to an agreement with Europa (the licence operator), Angus will pay 25% of the estimated £3.2m total cost of drilling the well.
Planning permission was granted for Bury Hill Wood in 2015 following a public inquiry. But Europa is still negotiating with Surrey County Council to fulfil planning conditions. And an environmental permit has not yet been applied for. Europa has estimated the well could produce 5.6m barrels of oil, which the company said would make it the fifth biggest UK onshore oil field.
The Bury Hill Wood site is 5km south of Brockham, where Angus recently carried out work on one of the wells.
It is also 12km west of Horse Hill, where an application has been submitted for flow testing and additional wells. One of the partners at Horse Hill, UK Oil and Gas Investments PLC, now has the biggest stake in PEDL143.
Private share issue
Angus said the deal – still subject to approval by the Oil and Gas Authority – has been paid for by a £2m private share issue.
The company said the funds would also pay for its extra 10% interest in the Brockham oil field licence, PL235, bought from Terrain Energy Ltd in December. The cost of this is estimated at £300,000. Angus additionally has the option to acquire an extra 10% interest in the Lidsey oil field licence PL241.
Jonathan Tidswell-Pretorius, chairman of Angus Energy, said:
“Participation in the Holmwood-1 exploration well is a strategic opportunity for Angus and wholly consistent with our strategy of acquiring, managing and monetising select projects to add to our portfolio. Following the successful completion of our work to complete, log, case and cement the well at the Brockham production site, the Acquisition will give the Company access to a second future production site to access the subsurface in this part of the Weald basin.”
“Very excited about Holmwood”
This is Europa’s second farm-out on PEDL143. In May 2016, Union Jack Oil acquired a 7.5% stake in return for paying 15% of the costs of Bury Hill Wood.
Europa’s Chief Executive, Hugh Mackay, described today’s deal as great news. He said:
“Europa will have a fully carried 20% share in Holmwood and the benefit of a partner with expertise in the Weald basin”.
“As the operator of the nearby Brockham oil field, Angus can provide invaluable technical insights in tandem with our other partners including UKOG, a major stakeholder in the Horse Hill discovery.”
In an interview with Proactive Investors today, he added:
“We’re very excited about the Holmwood prospect. … I am very confident that we’re going to find oil.”
Key points of the deal
- Angus takes a 12.5% working interest in PEDL143
- Angus will pay 25% of the costs to drill the well, up to £3.2m, and 12.5% of costs above that
- Europa will pay 20% of costs above the cap
- If oil is discovered, Angus will make a deferred payment to Europa of £265,625 covering back costs plus a 25% uplift
Interest in PEDL143
Subject to approval the interest in PEDL143 is now:
UK Oil and Gas 30%
Europa 20% (operator)
Egdon Resources 18.4%
Angus Energy 12.5%
Warwick Energy 10%
Union Jack Oil 7.5%
Altwood Petroleum 1.6%