Enegi, ABT Team up to Apply for UK Offshore Assets
Enegi Oil has entered into a strategic partnership with Advanced Buoy Technology (ABTechnology) Ltd (“ABT”) to apply for offshore assets in the UK North Sea under the 27th Seaward Licensing Round (“the Licencing Round”), organised by the Department of Energy and Climate Change (DECC), which has already commenced.
As stated in the release dated 19 May 2011, ABT has access to buoy technology and industry expertise that enables the economic development of proven offshore oil and gas assets classified as marginal or sub-economic under conventional development methods. In particular, ABT has a strategic partnership with Wood Group PSN, the international energy services company, to commercialise and ensure deliverability of unmanned buoy technology.
The strategic partnership between Enegi and ABT is the culmination of many months of negotiations, which further develops the Company’s strategy of reducing risk concentration, enabling Enegi to tap into the potential presented by proven assets that remain underexploited, whilst reducing upfront costs.
Under the strategic partnership, Enegi and ABT will each contribute 50% of the costs incurred by participating in the Licencing Round in return for an equal stake in any licences awarded. Only in the event that ABT’s buoy technology is used, will Enegi pay ABT a gross royalty of 2.5% from revenue generated.
International energy consultants, Wood Mackenzie, estimate that there are 287 discovered fields in the UK North Sea, containing approximately 2.2 billion bbls of oil and 9 tcf of gas, that are considered non-commercial. This suggests there are potential multi-billion pound reserves in the UK North Sea that remains to be unlocked. Preliminary analysis conducted by ABT and Enegi has identified 58 discovered fields, in unlicensed acreage in the UK North Sea with a combined resource of approximately 850 million bbls of oil and 685 bcf of gas, which are technically suitable for development using buoy technology. These fields will be screened further, taking into account geological risk and capital requirements, to determine the most commercially attractive licences to apply for in the Licensing Round.
David Parry, a Director of Enegi, commented:
“The strategic partnership with ABT opens up an asset class that we believe has significant potential. As these are discovered fields a great deal of the exploration risks have already been eliminated and, with the right technology, we believe that significant value can be unlocked in a relatively short time when compared to conventional exploration and development. As such, we believe this is a very exciting development that fits well with the Company’s existing opportunities and strategy. These are interesting times for the Company as we continue to execute our strategy of reducing risk concentration and look to establish ourselves as a major international oil and gas company.”
Source: Enegi Oil, March 14, 2012