Angus Energy has outlined plans for the Saltfleetby gas site in Lincolnshire after approval of its acquisition of a 51% stake.
The company announced that the Oil & Gas Authority (OGA) had approved the transfer of the licence and operatorship from Wingas Storage UK Ltd.
Shares rose briefly above 1p, for the first time in almost a month, but closed at 0.98p.
Angus managing director, George Lucan said:
“This comes as fantastic news for the Company and opens up a pathway to real production, profits and cashflow without the exploration risk attendant on many other projects.
“This is gas right next door to one of the dozen or so entry points on the NTS system. This is gas producing on a steady and predictable decline curve for 20 years. This is gas to be pulled immediately from two wells which show the same or greater well head pressure than when they were shut in in 2017.”
Angus said it still needed OGA approval for a field development plan and consents from the Environment Agency, Health and Safety Executive and North Lincolnshire Council.
The company said it would seek planning approval for additional equipment on the site and laying pipeline extensions. Design work was underway with National Grid to reconnect the site to the gas network at Theddlethorpe, it said.
Angus also said it had prepared an abandonment plan for two of the eight wells at Saltfleetby to “reduce overall liability of the field”. It said it hoped to carry this out within four to six weeks, subject to regulatory approvals.
Estimated gross production in the first year was 17 million to 19 million therms, Angus said.
In October, Angus announced it had taken out a £1.5m loan to pay for decommissioning at its four sites. The cost at Saltfleetby was estimated at £1.25m.
The field was discovered in 1996 after re-entering an exploration well drilled in 1986. It went on stream in December 1999 producing from Early Wesphalian sandstones.
Wingas, which has been renamed Saltfleetby Energy, owns the remaining 49% of the field.