Investor prepares to buy UK onshore oil and gas company

Rolf Gerritsen

Rolf Gerritsen, chief executive of Metal NRG, in an interview with Proactive

A UK onshore oil and gas company could be bought up by the investment company Metal NRG by the end of the summer.

The unnamed company was described by Metal NRG as small, privately-owned and operating in a well-known UK basin with conventional production licences.

Metal NRG said in a statement last month it had agreed heads of terms and hoped to acquire the company by September 2020.

The statement said:

“Following screening and preliminary appraisal, the company has identified a number of onshore oil and gas assets in the UK and has entered into a heads of terms agreement with the owners of a small portfolio of onshore, conventional, oil and gas producing licences, with the aim of  acquiring the portfolio within a three month timeframe.”

Chief executive Rolf Gerritsen said in interviews that the target company generated cash flow and was “close to break even, if not a little bit over”.

He said the company’s production was “not huge” but there was “very substantial potential increase on production in a relatively short period of time”. He described the acquisition as “relatively low risk from a technical perspective”.

The Oil & Gas Authority (OGA) lists 15 producing companies onshore in the UK in March 2020, the most recent data available. Most are stock market listed, large or with interests in shale gas.

On the OGA list there are three privately-owned small conventional companies producing onshore in the UK:

  • Blackland Park Exploration operates oil production sites at Newton-on-Trent and Whisby in Lincolnshire. In the most recent 14th licence round, it won two licences, PEDLs 313 and 315 in the East Midlands, but they are no longer listed by the Oil & Gas Authority.
  • Onshore Oilfield Services Limited operates the Farleys Wood field in Nottinghamshire.
  • Third Energy operates gas fields in North Yorkshire. But it was bought only last year by York Energy and previously attempted to frack at Kirby Misperton. DrillOrDrop reported last month that the Third Energy’s gas fields are not currently producing.

Metal NRG said the acquisition would be made by a special purpose vehicle. This would be a newly incorporated company that would by 50% owned by Metal NRG and 50% by private investors.

UK onshore oil and gas would be a new direction for Metal NRG, which has interests in gold and uranium.

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