Large E&P player interested in Corallian’s block off UK

UK oil and gas company Corallian and its joint venture partners, Upland Resources and Baron Oil, have signed a work-sharing and confidentiality agreement with an undisclosed ‘large European E&P company’ for licence P2478 in the Inner Moray Firth which could lead to a future farm-out deal.

Location of P2478 (marked in red); Source: Corallian
Location of P2478 (marked in red); Source: Corallian

Corallian said on Tuesday that the JV partners agreed to cease marketing a joint farmout of the license to industry until 30 September 2020, during which period the undisclosed E&P firm will complete its regional technical work and share its data and interpretations over the area with the partners.

The company added that it would continue to provide data to the E&P company under the confidentiality arrangements.

By mutual agreement, Corallian and its partners may extend the exclusivity period with the interested party until 31 December 2020 should the company wish to negotiate farm-in terms to earn an interest in the licence.

The P2478 licence, in which Corallian has a 45 per cent interest and licence administrator, contains the Dunrobin prospect.

The prospect consists of three large shallow Jurassic rotated fault blocks that are mapped mostly on 3D seismic data within a single culmination with direct hydrocarbon indicators.

Reservoir targets are the Jurassic Beatrice and Dunrobin sandstones, overlain by a thick Kimmeridge Clay to the seabed. The prospect is approximately in the North Sea, 30 kilometres offshore with a water depth of around 75 metres.

The Dunrobin structure covers some 40 square kilometres and has Pmean prospective resources of 174 mmboe, with potential for 396 mmboe (P10).

Corallian also stated that it hoped the work with the interested E&P company would lead to a farmout by the end of the year.

In separate statements on Wednesday, the CEO of Upland Resources Chris Pitman and the executive chairman of Baron Oil Malcolm Butler had their take on the signing of the agreements.

Pitman stated that a farm-down to a significant industry partner that could bring regional expertise and work programme funding to de-risk and evaluate the P2478 licence was entirely consistent with Upland’s strategy. Such agreements, according to Pitman, were the first step in that process.

Butler added that he hoped that these studies would improve the chances of bringing in a partner to assist in funding, should the group elect to drill in due course. He did point out though that the interested party had not made any commitment to farm in at this point but still saw the agreements as good news.

It is worth reminding that the P2478 licence was awarded to the company in September 2019. Corallian announced in late November that it would begin marketing its Unst and Dunrobin prospects for farm-out later that year.