TIDMCLNR
RNS Number : 4462U
Cluff Natural Resources plc
25 November 2019
Cluff Natural Resources Plc / Index: AIM / Epic: CLNR / Sector:
Natural Resources
25 November 2019
Cluff Natural Resources Plc ('CLNR' or 'the Company')
Operational and Licence Update
Cluff Natural Resources Plc, the AIM quoted natural resources
investing company with a high impact exploration and appraisal
portfolio focused on the Southern and Central North Sea gas basin,
is pleased to provide an operational update in relation to its
portfolio of UK exploration licences as well as applications for
additional licences which have the potential to significantly
enhance the licence portfolio.
32(nd) Offshore Licence Round
Following success in the previous major offshore licensing round
in 2018 when the Company was awarded six licences, the Company is
pleased to confirm that it has submitted multiple applications for
additional licences in the UK Oil & Gas Authority's latest 32nd
UK Offshore Licensing Round.
The Company's applications are focussed on its current core
operational areas in the Southern Gas Basin and Central North Sea
and are designed to be complementary to the existing portfolio. The
blocks applied for contain oil and gas prospects that are
consistent with the Company's strategy of growing its licence
portfolio by:
-- Identifying and targeting overlooked and/or less well understood opportunities;
-- Targeting prospects in close proximity to existing
infrastructure, thus enhancing the potential for commercial
development; and
-- Creating value through investment in technical work, farm
outs and introducing partners with a view to drilling
All of the applications have been made solely by CLNR, with the
exception of one which has been made jointly with an established
international operator.
UK Oil and Gas Authority ("OGA") guidance indicates that licence
awards are likely to take place in Q2 2020. Further announcements
will be made in due course.
Success in this licensing round would further expand, enhance
and diversify the Company's existing portfolio. The Board views the
blocks applied for as being highly prospective with many containing
undeveloped discoveries and exploration upside which could
significantly enhance both the pipeline of potential drilling
opportunities and the overall prospective resources associated with
the Company's portfolio.
P2252 - Pensacola (CLNR 30%)
Licence P2252 contains the Pensacola prospect which is estimated
to contain gross P50 prospective resources of 309 BCF, with
additional upside on the block associated with the Lytham and
Fairhaven prospects. In May 2019, the Company completed the
farm-out of Licence P2252 to Shell UK Limited ("Shell"). Shell has
a 70 per cent. working interest in Licence P2252, with the Company
retaining a 30% non-operated interest.
The new 3D seismic survey acquired over the Pensacola prospect
in August of this year, along with legacy 3D data over the Lytham
and Fairhaven prospects, is currently undergoing pre-processing
before being delivered to Shell's in-house processing team early in
the new year for further expert analysis and interpretation.
The Board understands that delivery on the final volumes is on
schedule for mid-2020 and will be followed by a period of
re-interpretation with well investment decision before the end of
November 2020.
The Zechstein Reef Play on Pensacola has seen significant
activity and successful drilling over the last six months with
Rathlin Energy announcing a significant discovery at West Newton,
in East Yorkshire, where a 65m hydrocarbon column was confirmed in
the West Newton A-2 well. Offshore, ONE Dyas are reported to have
recently discovered hydrocarbons in the Darach Central-1 well which
was testing both a Zechstein Reef and a deep Carboniferous
target.
P2437 - Selene (CLNR 50%)
Licence P2437 contains the Selene prospect which is estimated to
contain gross P50 prospective resources of 291 BCF with additional
upside on the block associated with the Sloop discovery and the
Endymion prospect. Completion of the farm-out of 50% of Licence
P2437 to Shell occurred in August 2019.
CLNR and Shell have taken delivery of the most recently
processed version of 3D seismic data which has been acquired from a
previous licence operator. Both parties are now actively working
with the available data and continue to work towards making a well
investment decision on the Selene prospect and drilling a well at
the soonest possible opportunity.
P2352 - Dewar (Central North Sea) (CLNR 100%)
The Dewar Prospect on Licence P2352 is estimated to contain up
to 272 million barrels of light oil (P10 STOIIP) with P50
Prospective Resources of 39.5 million barrels in the Forties
Sandstone.
As previously indicated, the Company has been running a farm-out
process on the Dewar Prospect which is located close to (<5km)
the BP operated Eastern Trough Area Project (ETAP) Central
Processing Facility in the Central North Sea. The prospect has
generated a significant amount of interest and there are a number
of established operators currently in the project dataroom. Now
that the 32(nd) OGA Licensing Round is complete, the Board expects
this process to gather momentum and will aim to draw this process
to a close in the coming months.
A feasibility study carried out by io oil & gas consulting
has estimated the Dewar project to have a post-tax NPV10 of GBP555
million and a post-tax project IRR of 123%, in a P50 prospective
resource scenario.
P2428 - Cupertino (CLNR 100%)
The Company has recently taken delivery of over 850 line
kilometres of reprocessed 2D seismic over Licence P2428 which
contains the Cupertino prospect. This legacy data was originally
acquired in 1992 and has been reprocessed to pre-stack depth
migration (pre-SDM) using the latest processing workflows, which
has resulted in a significant uplift in image quality throughout
the dataset.
This newly reprocessed data is currently being interpreted in
house, focussing on the early Carboniferous section which includes
the TCF scale Cupertino prospect, as well as new opportunities that
the Company has identified in the Zechstein and a possible
westwards extension of the Rotliegendes play fairway which may be
analogous to the Cygnus field.
Further technical work is required, and the Company will update
the market in due course. It is now considered likely that the area
will need new 3D seismic data acquired across the prospective areas
before a drilling opportunity can be fully defined and to that end
the Company will seek to acquire this seismic, ideally by way of
farm-out, in 2020.
P2424 - Cortez (CLNR 100%)
The Company is engaging with seismic reprocessing contractors
and will seek to commence reprocessing of the legacy 2D seismic
dataset over licence P2424, which includes the Cortez Prospect. The
Company expects to see a significant uplift in data quality which
will help mature the Cortez prospect which has many similarities to
the nearby Breagh gas field.
Delivery of the final reprocessed seismic data will be expected
within six to nine months following the formal start of
reprocessing.
Graham Swindells, Chief Executive Officer of Cluff Natural
Resources commented:
"We have made significant investment in this latest licensing
round which has allowed us to submit multiple high quality
applications in our core areas of the Southern North Sea and
Central North Sea where we have already demonstrated success. The
blocks applied for contain a number of drilled discoveries,
undrilled prospects and leads and, if awarded, will build scale,
further diversifying the investment portfolio and significantly
enhancing the Company's resource base which we anticipate will
create a strong pipeline of future drilling opportunities."
"We are also very pleased with the significant progress being
made on the existing portfolio, in particular on the Pensacola and
Selene licences, which Shell farmed into earlier this year, as we
work towards a firm well commitment on Selene and Pensacola.
Furthermore, our farm out process on the Dewar prospect has
generated significant interest which we believe will strengthen
with the licensing round behind us."
"This is an exciting time for the Company as we continue to
deploy our high-impact exploration-based strategy in a sought-after
area."
**S**
For further information please contact the following:
Cluff Natural Resources Plc Tel: +44 (0) 20 7887
2630
Graham Swindells / Andrew Nunn
Allenby Capital Limited (Nominated Adviser Tel: +44 (0) 20 3328
& Joint Broker) 5656
David Hart / Alex Brearley / Asha Chotai
(Corporate Finance)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Nick Rhodes / Ashton Clanfield
Camarco Ltd Tel: +44 (0) 20 3757
4983
Billy Clegg/James Crothers / Owen Roberts
(Financial PR)
Notes to Editors
Cluff Natural Resources is a natural resources investing company
listed on the AIM market on the London Stock Exchange (CLNR.L) with
a high impact portfolio of operated and, following a farm-out to
Shell U.K. Limited in February 2019, non-operated exploration and
appraisal assets located within the UKCS's mature hydrocarbon
basins. The Company's diversified portfolio contains near term,
infrastructure focussed oil and gas exploration drilling
opportunities in both the Central and Southern North Sea together
with larger, high impact opportunities in new play types along the
northern margin of the Southern Gas Basin.
The portfolio has a significant P50 prospective resource base in
excess of 2.4 TCF (gross, gas equivalent) across a number of
prospects with chances of success ranging from 9 to 49%.
Cluff Natural Resources is focused on extracting much needed gas
from the North Sea to supply the UK's energy mix which is currently
heavily reliant on foreign supply. Following a successful farm-out
of Licence P2252 and P2437 to Shell U.K. Limited the Company is
seeking to repeat this farm-out success with its other licences
awarded in the 30(th) Offshore Licencing Round including licence
P2352 which contains the Dewar oil prospect.
The Company has a strong institutional investor base and a
portfolio which offers a unique opportunity of high quality, low
risk and low-cost drilling prospects with potentially high impact
results in an area where recent exploration has targeted both
mature and new plays and has resulted in large discoveries.
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of CLNR, is a "Qualified Person" in accordance with the Guidance
Note for Mining, Oil and Gas Companies, June 2009, of the London
Stock Exchange. Andrew has reviewed and approved the information
contained within this announcement.
The GIIP volumes and Prospective Resources have been presented
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).
Glossary of Technical Terms
BCF: Billion Cubic Feet.
Chance of Success (GCoS): 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.
GIIP: Gas Initially In Place.
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.
PRMS: Petroleum Resources Management System (2007).
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.
STOIIP: Stock tank oil initially in place is the estimated
amount of crude oil present in a hydrocarbon reservoir prior to
production taking place.
TCF: Trillion Cubic Feet.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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