Industry

Two oil companies pull out of Weald licence

pedl143

PEDL143 in Surrey. Map: Oil & Gas Authority

UK Oil & Gas plc has acquired the interests of two companies in the Holmwood exploration licence, south of Dorking in Surrey.

Europa Oil & Gas Ltd and Union Jack Oil plc announced today they were selling their stakes in licence, PEDL143.

The area saw a 10-year local planning battle against drilling near Leith Hill in the Surrey Hills Area of Outstanding Natural Beauty. Proposals for an exploratory oil well were abandoned in September 2018. This followed the refusal by the environment secretary, Michael Gove, to renew a lease on Forestry Commission land.

The licence is next to PEDL137, where UKOG is currently testing its oil exploration well at Horse Hill, near Horley.

180911 Leith Hill fencing removed UWOC2

Clearance of fencing from the Leith Hill oil exploration site in Surrey, 11 September 2018. Photo: Used with the owner’s permission

Last month, Europa announced it was transferring operation of the Holmwood licence to UKOG.

Europa said in a statement this morning it was selling its 20% stake in PEDL143 for £300,000 worth of UKOG shares.

This would allow the company to focus on interests in Atlantic Ireland, elsewhere onshore in the UK and new ventures in north Africa and north west Europe, Europa said.

Chief executive, Hugh Mackay, said:

“We continue to look to maximise production from our UK onshore assets including our three producing fields and the Wressle discovery in the East Midlands. Finally, we are closing in on adding a new exploration project to our portfolio, a high impact, new venture in Morocco which, in terms of size and company-making potential, is on a similar scale to our Irish licences.

Union Jack Oil, which held 7.5% in PEDL143, said it was selling its interest to UKOG for £112,500 of UKOG shares.

Executive chairman, David Bramhill, said in a statement the deal would allow Union Jack to focus on the East Midlands, Humber Basin and East Yorkshire:

“Our focused areas hold working interests in material and potentially company-changing assets including: 16.665% in West Newton, where drilling is set to commence in the very near future; 27.5% of Wressle that contains a discovery awaiting planning permission for development; and 22% of Biscathorpe that requires seismic reprocessing to provide information following recent drilling and for a potential side-track well in due course.

“In addition, Union Jack’s 20% working interests in the producing Keddington and Fiskerton Airfield oil fields provide us with oil revenues and exposure to additional workover and drill targets in our focused areas.”

The deal gives takes UKOG’s interest in PEDL143 from 40% to 67.5%. The other companies with a stake in the licence are Altwood Petroleum (1.6%), Angus Energy Weald Basin No. 3 Ltd (12.5%) and Egdon Resources (18.4%).

UKOG’s chief executive, Stephen Sanderson, said in a statement:

“We are delighted to acquire this further significant share of such a highly prospective exploration Licence, which contains, in UKOG’s view, one of the best undrilled Portland and Kimmeridge prospects in the Weald Basin. The proximity to UKOG’s Horse Hill field, together with the Company’s operational and subsurface expertise in the area, adds potentially significant operational and cost synergies to the project’s overall benefit. UKOG, as the new Licence operator, will now push ahead to finalise a new well location outside of the Surrey Hills AONB.

Today’s deals have to be agreed by the Oil & Gas Authority.

UKOG shares have fallen since the announcement. At the time of writing, the company share price was 1.13p, down just under 1%.

7 replies »

  1. What a misleading Headline. the company’s Haven’t pulled out at all they have simply sold their licences in exchange for shares in the Now larger company UKOG.

    • Gasman

      I think it is a fair headline. BP pulled out of Vietnam ( and a few other places ) by selling out to someone else ( I think the headline when Bp sold forties to Apache was ‘Bp pulls out of Forties’, in the London press and in the P&J. Apache buys Bp interest in forties ). Oil companies are often asked if they are pulling out of the North Sea.

  2. Ahh, but not so exciting gassman! Perhaps more independent, but everything has its limitations.

    I do recall a while ago a prediction that changes in UK on shore ownership/consolidation would be the order of the day for 2019 (just like N.Sea). Seems it is well (excuse the pun) underway. It does show that constant predictions of forcing companies out of the market are flawed. Others just take over.

    • Paula C

      The spread is 4.5% so 1% either way does not mean anything. You can pay 1.14p for a share or sell for 1.12p. One might ask, why has the share price not moved!

Leave a Reply to Paula C Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.