Reabold Resources, a key investor in the West Newton oil and gas field in East Yorkshire, is to receive £4.4m from Shell in the coming days.

The payment, announced today, is the final tranche of money from Reabold’s sale of Corallian Energy.

It follows development consent for Corallian’s  Victory gas field, west of Shetland.

Reabold said it has already received £8.3m as part of the deal. It said it would use the money to “advance the development of assets across its portfolio, as well as distributing excess cash to shareholders”.

In a statement, Reabold referred to its investments in West Newton and Colle Santo, in southern Italy. It described them as “significant gas resources”. They would, the company said, “make a meaningful contribution to improve energy security in Western Europe”.

Reabold Resources has a 16.665% stake in the West Newton licence, PEDL183, and holds 59% of the shares in the licence operator, Rathlin Energy.

Rathlin is required by the industry regulator, the North Sea Transition Authority, to drill and test a new appraisal well at West Newton by June 2024. It has also committed to the same deadline to recomplete or drill a sidetrack to one of the existing three wells and carry out testing.

Company accounts for Rathlin revealed that it needs more money to drill at West Newton. Rathlin’s share of the work is likely to cost about £9m, the accounts estimated in September 2023. At the time, the company reported it had £3.8m in cash.

Reabold’s co-chief executive, Stephen Williams, said of the final payment from Shell:

“This represents a significant moment in the delivery of the Reabold strategy to identify, fund and monetise underappreciated, but strategically important assets.

“We remain focussed on progressing other key projects in the Reabold portfolio in 2024 and realising further value to reward shareholders for their ongoing support of the Company.”

Earlier this month, Mr Williams and other members of the Reabold board fought off a second challenge from a group of shareholders, which wanted to farm-out operations at West Newton if drilling were successful.

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