Oilex enters exclusivity agreement for three Irish Sea discoveries
Oil and gas exploration and production company Oilex has entered into an exclusivity agreement with Koru Energy for a potential acquisition of up to a 50 percent interest in three licenses in the East Irish Sea.
Oilex said on Monday that the licenses in the East Irish Sea include the Knox and Lowry, and Whitbeck (KLW) gas discoveries in the East Irish Sea.
The KLW discoveries are a series of shallow-water gas accumulations discovered between 1992 and 2009. Oilex and Koru will look to bring them into production, should the acquisition go through.
The discoveries are ideally located very close to a subsea tie-back pipeline which delivers gas to the North Morecambe gas production platform and terminal.
The East Irish Sea is a prolific basin which has produced more than six tcf of gas to date with considerable existing gas production, gathering, processing, and transportation infrastructure.
As for the projects, the Knox and Lowry gas discovery projects are advanced after a drill stem tested with reported raw gas flows of 12.3 mmcfd and 22 mmcfd, respectively, which demonstrated good quality reservoirs similar to nearby analogous fields.
According to the company, Centrica-owned Spirit Energy and Bayern Gas is the owner and operator of the tie-back pipeline and North Morecambe gas processing terminal and has indicated support for the development of the KLW discoveries.
Oilex to acquire 50% interest in licenses
Koru holds the exclusive right to acquire a 100 percent interest in production license P2459, Block 113/28a (Knox) and 113/29a (Lowry), and P2444 license, Block 110/3b (Whitbeck) from Reach Coal Seam Gas.
Under the proposal, Oilex will enter into an agreement with Koru for the 50 percent interest in the licenses and for a cash consideration of £500,000 ($622,000). These funds payable to Koru will complete the acquisition of the licences from Reach. Following the completion of the agreement, Koru will be the operator of the KLW joint venture.
Oilex stated that no definitive binding agreement was executed and cautioned investors against making any investment decision.
The company currently has exclusivity until September 30, during which time it is intended that the terms of the definitive documentation and funding for the transaction will be finalized
Managing Director of Oilex Joe Salomon said: “The licenses, which incorporate discovered and tested gas volumes and comprise a portfolio of projects, provide the initial platform for the company to build the necessary critical mass for a sustainable UKCS business.”
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