TIDMCLNR
RNS Number : 6172Q
Cluff Natural Resources plc
01 December 2016
Cluff Natural Resources Plc / Index: AIM / Epic: CLNR / Sector:
Natural Resources
1 December 2016
Cluff Natural Resources Plc ('CLNR' or 'the Company')
Significant Increase in P50 Prospective Resources of Licence
P2252 in Southern North Sea & Update on Option over North Sea
Oil Licences
CLNR, the natural resources investing company, is pleased to
announce a significant increase in P50 Prospective Resources on its
100% owned Licence P2252 from 162 BCF to 636 BCF following
technical work focussing on the Zechstein prospects located in the
Southern North Sea. This increase is primarily due to the newly
named Pensacola Prospect, which the Company estimates to have P50
Prospective Resources of 424 BCF, providing significant exploration
upside potential on the licence.
Key Highlights
-- Significant increase from 162 BCF to 636 BCF in P50
Prospective Resources on Licence P2252 following receipt of
recently reprocessed 3-D seismic data
-- Acquisition of recently reprocessed 3-D has provided an
enhanced level of confidence in the mapping of prospects on this
licence
-- Revised interpretation of the St. Annes lead now believed to
form outer edge of a larger circular patch reef complex, the
Pensacola Prospect, providing major upside with P50 Prospective
Resources of 424BCF
o The patch reefs are analogous to producing fields in Poland
and the US and have the potential to contain significant gas
volumes and high quality reservoirs
-- Completion of a seismic inversion process on the 3-D dataset
in conjunction with Halliburton has indicated the likely presence
of a high density North-South oriented fracture network across the
Lytham structure which should enhance reservoir properties and
production characteristics of the prospect
-- This update increases the Company's combined P50 Prospective
Resources to 2.37 TCF contained within a small number of low cost,
high impact exploration opportunities located in close proximity to
new or proposed infrastructure
Algy Cluff, Chief Executive & Chairman commented: "We are
delighted that our continued technical focus on these core licences
continues to de-risk known gas prospects and enhance the
exploration upside contained within the portfolio. The Company has
a 100% equity position in its highly prospective licences in the
Southern North Sea which deserve to be fully appraised. We are
confident that the quality and scale of these assets will continue
to attract the interest of existing operators and potential new
entrants as we progress through the farm-out process."
Further Information on Licence P2252
Technical work focussing on the Zechstein prospects located on
Licence P2252 has been completed in conjunction with the Company's
retained sub-surface consultants, Lyme Bay Consulting. This work,
which was based on reprocessed geophysical datasets not available
at the time of the Company's initial Competent Person's Report
released in December 2015, has resulted in a significant resource
upgrade on the Lytham and Fairhaven prospects and highlighted major
exploration upside potential in the form of a Zechstein reef
build-up ('the Pensacola Prospect'), similar to those indicated at
the nearby Crosgan discovery and the Ossian and Aurora prospects.
This work has resulted in the P50 Prospective Resources associated
with the prospects on this block being increased from 162 BCF to
636 BCF.
Revised volumetrics and risking for the prospects on P2252 are
listed in the table below:
Prospect Type PRMS Net Prospective Resources GCoS
Status (BCF)
----------- ---------------- ---------- -------------------------------- -----
P90 P50 Mean P10
----------- ---------------- ---------- ------ ------ ------ -------- -----
Fractured
Lytham Hauptdolomite Prospect 52 123 137 244 49
----------- ---------------- ---------- ------ ------ ------ -------- -----
Carboniferous Prospect 12 44 68 149 30
---------------- ---------------------- ------ ------ ------ -------- -----
Fractured
Fairhaven Hauptdolomite Prospect 18 45 53 98 43
----------- ---------------- ---------- ------ ------ ------ -------- -----
Fringing
Pensacola Reef Prospect 113 270 338 650 20
----------- ---------------- ---------- ------ ------ ------ -------- -----
Lagoon
Fill Prospect 67 154 186 347 16
---------------- ---------------------- ------ ------ ------ -------- -----
TOTALS 262 636 782 1,488
----------------------------------------- ------ ------ ------ -------- -----
The acquisition of recently reprocessed 3-D seismic has provided
a greater level of confidence in the mapping of the Lytham and
Fairhaven Zechstein (Fractured Hauptdolomite) Prospects where
previous exploration wells by third parties indicated significantly
elevated levels of gas during drilling operations. This revised
mapping and comparison with close analogues within the basin, such
as the giant Hewett Field, has allowed a revised assessment of the
estimated gas volumes associated with these structures which has
increased the combined P50 Prospective Resources on this prospect
from 94 BCF to 168 BCF.
Additionally, the new 3-D seismic data set has also allowed for
a revised interpretation of the St. Annes lead highlighted
previously. It is now believed that these leads form the outer edge
of a larger circular patch reef complex, now named the Pensacola
Prospect, similar to those seen on adjacent blocks to the east.
These patch reefs are analogous to producing fields in Poland and
the US and have the potential to contain significant gas volumes
and high quality reservoirs. The Company estimates that the
Pensacola Prospect has P50 Prospective Resources of 424 BCF between
the reef margin which has the potential to contain high quality
reservoir facies and the internal lagoon sediments which are
potentially more variable in terms of overall reservoir
quality.
Completion of a seismic inversion process on the 3-D dataset for
Licence P2252, in conjunction with Halliburton, has indicated the
likely presence of a high density North-South oriented fracture
network across the Lytham structure, which should enhance the
reservoir properties and production characteristics of the
prospect. Work continues on the outline design and likely
production characteristics of the appraisal well required to test
the commercial viability of this prospect.
Update on Option over North Sea Oil Licences
On 10 May 2016 the Company announced that it had entered into a
sale and purchase agreement ('SPA') with Verus Petroleum (SNS)
Limited ('Verus') in connection with the purchase of a 5%
participating interest in UKCS licences P1944 (Block 14/20e) and
P2156 (Block 15/11 & 16f) located in the Outer Moray Firth
which contain the Fynn and Penny prospects. The consideration was
GBP1 and completion of the acquisition of that interest was subject
to various approvals. In addition, an exclusive option was granted
by Verus in favour of the Company over its remaining 20%
participating interest in these licences (the 'Option'). As the
necessary approvals to allow the acquisition of the 5%
participating interest under SPA to be completed have not yet been
received, the Company has decided to exercise its right to
terminate the SPA in regards to the 5% participating interest and
the parties have instead contemporaneously expanded the Option from
a 20% to a 25% participating interest in each of the licences, on
the same terms as previously disclosed.
Qualified Person's Statement:
Andrew Nunn, CLNR's Chief Operating Officer, has approved the
information contained in this announcement. Mr Nunn is a Chartered
Geologist.
The GIIP volumes and Prospective Resources have been prepared in
accordance with the 2007 Petroleum Resources Management System
(PRMS) prepared by the Oil and Gas Reserves Committee of the
Society of Petroleum Engineers (SPE), reviewed, and jointly
sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG) and the Society of
Petroleum Evaluation Engineers (SPEE).
**S**
For further information please visit
www.cluffnaturalresources.com or contact the following:
Cluff Natural Resources Plc Tel: +44 (0)20
7887 2630
Algy Cluff / Graham Swindells
/ Andrew Nunn
Panmure Gordon (UK) Limited Tel: +44 (0)20
7886 2500
Adam James / Atholl Tweedie (Corporate
Finance)
Tom Salvesen (Corporate Broking)
Allenby Capital Limited Tel: +44 (0)20
3328 5656
Chris Crawford / Katrina Perez
(Corporate Broking)
St Brides Partners Ltd Tel: +44 (0)20
7236 1177
Lottie Brocklehurst / Frank Buhagiar
(Financial PR)
Glossary of Technical Terms
PMRS: Petroleum Resources Management System (2007)
BCF: Billion Cubic Feet
Prospective Resources: Are estimated volumes associated with
undiscovered accumulations. These represent quantities of petroleum
which are estimated, as of a given date, to be potentially
recoverable from oil and gas deposits identified on the basis of
indirect evidence but which have not yet been drilled.
Risk Factor: For prospective resources, means the chance or
probability of discovering hydrocarbons in sufficient quantity for
them to be tested to the surface. This, then, is the chance or
probability of the prospective resource maturing into a contingent
resource. Prospective resources have both an associated chance of
discovery (geological chance of success) and a chance of
development (economic, regulatory, market and facility, corporate
commitment and political risks). The chance of commerciality is the
product of these two risk components. These estimates have been
risked for chance of discovery but not for chance of
development.
TCF: Trillion Cubic Feet
Definition of Prospective Resources, P90, P10, P50, Pmean
While there may be a significant risk that sub-commercial or
undiscovered accumulations will not achieve commercial production,
it is useful to consider the range of potentially recoverable
volumes independently of such a risk.
Prospective Resources are those quantities of petroleum which
are estimated to be potentially recoverable from undiscovered
accumulations. These estimates are derived from volumetric
estimates for the reservoir size, estimates of the reservoir
characteristics (porosity, permeability, oil saturation). The basis
of these estimates would be available geological and geophysical
data, and the data from any existing wells in the given area.
Any estimation of resource quantities for an accumulation is
subject to both technical and commercial uncertainties and
consequently there will be a range of estimates which in general
will be substantially greater for undiscovered accumulations than
for discovered accumulations. In all cases, however, the actual
range will be dependent on the amount and quality of data (both
technical and commercial) which is available for that accumulation.
As more data become available for a specific accumulation (for
example wells and reservoir performance data) the range of
uncertainty would be reduced.
Probabilistic methods are normally used to quantify the
uncertainty in these estimated quantities and the results of the
analysis are typically presented by stating resource quantities at
the following levels of confidence:
P90 resource reflects a volume estimate that, assuming the
accumulation is developed, there is a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a low estimate of resource.
P50 resource reflects a volume estimate that, assuming the
accumulation is developed, there is a 50% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a median or best case estimate of resource.
P10 resource reflects a volume estimate that, assuming the
accumulation is developed, there is a 10% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a high estimate of resource.
Mean is the mean of the probability distribution for the
resource estimates. This is often not the same as P50 as the
distribution can be skewed by high resource numbers with relatively
low probabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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