MPX North Sea Sells Orlando Stake to Iona (UK)

MPX North Sea Ltd announces that, subject to approval of the DECC, it has sold its 30% interest in Licence P1606 to its co-venturer, Iona Energy Company (UK) Limited. Sorgenia E&P (UK) Ltd, the sister company of MPX, has also sold its 35% interest in the Licence to Iona.

The Licence contains the Orlando discovery (3/3-11) which was recently appraised by 3/3b-13 and 13Z. The development planning for the field is well advanced, including the purchase of certain long lead items enabling Iona to continue with its development.

“MPX is now in a position to concentrate on its exploration portfolio, of which the next well to be drilled will be on the Bardolph Prospect in Block 20/7 (MPX 15%) due to be spudded by the Operator (Nexen) in August or September this year,” said the company in a press release.

The Orlando Oil field lies in the UK sector of the North Sea within Block 3/3b, approximately 10 km north east of the Ninian Central Platform and was successfully appraised with the 3/3b-11 (1989) and 3/3b-13 (2012) and sidetrack wells. Based on its previous NI 51-101 reserve report effective Dec 31, 2011 at 100% working interest Iona calculates Proved (“1P”) reserves for the field of 6.8 MMbbls, Proved plus Probable (“2P”) reserves of 11.1 MMbbls, and Proved plus Probable plus Possible (“3P”) reserves of 16.2 MMbbls. Early analysis by Iona of the results of the 3/3b-13 well and sidetrack are consistent with previously reported year end reserve volumes. Iona intends to update its NI 51-101 Orlando reserve report upon Orlando Field Development Plan approval by the UK’s Department of Energy and Climate Change (“DECC”).

It has been agreed within the Orlando Sale and Purchase Agreement that upon Orlando Field Development approval by DECC, Iona will refund to Sorgenia and MPX, their historical costs of the Orlando Development to-date, approximating USD$48.25 million. Future staged payments will be made by Iona to Sorgenia and MPX commencing six months after first production from Orlando. The first payment will be USD$ 7.0 million with additional payments of USD$7.0 million, USD$7.0 million, USD$4.0 million, and USD$4.0 million made every six months thereafter respectively, amounting to a total payment of USD$29.0 million over 3 years. The final completion of the sale is conditional on the approval of the assignment of the license interests and operatorship by DECC. Request to approve this assignment has already commenced and it is expected that transfer of the license interest and operatorship will occur before December 31st 2012.

Iona’s Chief Executive Officer, Neill Carson commented: “The acquisition of our partners’ interests in Orlando makes sense as Iona will now operate both key developments, Orlando and Kells, to realize operational and portfolio synergies that are uniquely offered to Iona due to our dominant ownership in these satellite developments. A first oil date in 2013 is important to us and Iona is well placed to achieve this through having an advanced FDP, Environmental Statement, pipeline surveys, ownership of critical equipment such as subsea trees, and pipeline procurement contracts.”

[mappress]
Offshore Energy Today Staff, June 14, 2012