UK Government Approves Cladhan Field Development Plan

TAQA today announced that the development plan for its Cladhan field (Blocks 210/29a and 210/30a of the northern North Sea) has been approved by the UK government.

The initial phase of development will consist of two producer wells and one injection well. Cladhan is expected to produce over 17,000 boe/d initially with first oil expected Q1 2015. The production will be tied back to TAQA’s Tern Alpha platform which lies 17.5km northeast of the Cladhan field.

Leo Koot, Managing Director of TAQA’s UK business, said: “The Cladhan development is the third field that TAQA has developed and the largest project to date. Developing Cladhan as a tie back to Tern supports TAQA’s strategy to invest in our infrastructure as we recognise the crucial part it plays in allowing us to maximise recovery from the northern North Sea.”

TAQA currently has 40.1% in the Cladhan field but recently agreed to acquire further equity from Sterling Resources (UK) Ltd. (“Sterling”) in return for providing further funding arrangements to Sterling to take the project through the development phase. The agreement is structured so that equity is transferred to TAQA in a series of tranches with the result that if Sterling cannot secure other finance for the project before 30 June 2013, TAQA will acquire a further 12.6% equity in the Cladhan Field. In addition, 11.8% of Sterling’s remaining equity will be transferred to TAQA until such time as the costs which TAQA will carry on the 11.8% equity are repaid from production revenue. Assuming such repayment does occur, the resulting equities in the Cladhan field will be TAQA 52.7%, Sterling 13.8% and Wintershall 33.5%.

[mappress]

Press Release, April 24, 2013