North Sea entrant acquires two UKCS licencesTop Balmoral Sandstone showing Zeta prospect. From: P1946 Relinquishment Report

North Sea entrant acquires two UKCS licences

United agrees to sell UK Central North Sea Licences P2480 and P2519 to Quattro Energy Limited

As announced yesterday, newly formed Quattro Energy intends to acquire two UK Central North Sea licences north and east of the Piper field from United Oil and Gas.

United was awarded Licence P2480 in the 31st Licencing Round in August 2019 and Licence P2519 in the 32nd Licencing Round, in December 2020. United holds a 100% equity interest in each. Licence P2519 includes the Maria Discovery in block 15/18.

Quattro Energy is a new UK company incorporated in April 2021 by an experienced North Sea focused management team. The acquisition of United’s CNS interests is a first step towards Quattro’s objective to build a portfolio of oil & gas appraisal, development, and producing assets.

Licence P2480 contains the Zeta prospect as mapped by Azinor a few years ago, as described in the relinquishment report available through AEON’s PDR. The prospect is a Paleocene Balmoral deep-water sandstone closure with a P50 recoverable of 27 MMboe and a possibility of success of 17%. The perceived top seal risk, combined with a lack of clear seismically derived anomalies indicative of the presence of hydrocarbons in the Zeta reservoir and the inconclusive result of the EM study, have led Azinor to make the decision to relinquish the P1946 licence.

The transaction will result in an initial payment of £2 million (c. US $2.8 million) at completion. Subject to a Field Development Plan being approved for block 15/18, an additional uplift amount of £1.2 million (c. $1.7 million) will be paid to United.

This deal, which is subject to completion of satisfactory due diligence, definitive documentation and OGA approval, is expected to complete by 30 September 2021.

The divestment of these Licences, following a strategic review of the Company’s portfolio, will see United exit activities in the North Sea region. The transaction proceeds will provide financial flexibility for the Company to grow its low-cost production business in Egypt and the Greater Mediterranean area, complemented with selected high impact exploration opportunities in the Caribbean and Latin America.