OilexLTD granted exclusivity for EIS licensesKLW gas discoveries location. Source: OilexLTD

OilexLTD granted exclusivity for EIS licenses

The Australian oil and gas company has entered into an exclusivity agreement with Koru Energy for a potential acquisition of up to a 50% relevant interest in the Knox and Lowry, and Whitbeck (KLW) gas discoveries in the East Irish Sea.

The KLW Gas Discoveries are a series of shallow-water gas accumulations that were discovered between 1992 and 2009  by the then operators and successfully drill-stem tested confirming discovered volumes that Oilex and Koru would seek to bring into production, should the acquisition complete.

Seismic inline over the Whitbeck well, 110/3b-6A. Source: Relinquishment Report – Seaward P1547 Block 110/3b, Centrica Energy

The KLW Gas Discoveries are ideally located very close to a subsea tie-back pipeline, owned and operated by Spirit Energy, which delivers gas to the nearby and recently refurbished North Morecambe Gas Production Platform and Terminal.

The East Irish Sea (EIS) is a prolific basin which has produced more than 6TCF of gas to date with considerable existing gas production, gathering, processing and transportation infrastructure.

East Irish Sea Basin exploration and development activity. Source: The history of exploration and development of the Liverpool Bay fields and the East Irish Sea Basin, J. Bunce

Transaction Overview

Koru holds the exclusive right to acquire a 100% interest in UK Seaward Production Licence P2459, Block 113/28a (Knox) and 113/29a (Lowry) and P2444 Block 110/3b (‘Whitbeck’).

It is currently proposed that Oilex will enter into an agreement with Koru pursuant to which Oilex would acquire a 50% interest in the licenses and the KLW Gas Discoveries for cash consideration of £500,000.

The licenses would be held on a 50/50 basis between Oilex and Koru under a joint venture structure., with Koru as the operator.

Oilex has paid a non-refundable £50,000 exclusivity fee to Koru.

Project Overview

The Knox and Lowry gas discovery projects are well advanced having successfully flowed gas when drill stem tested with reported raw gas flows of 12.3 MMCFD and 22 MMCFD, respectively.

The main reservoir interval in the EIS and in each of the KLW Gas Discoveries is the prolific Lower Triassic Ormskirk Sandstone Formation.

Generalized stratigraphic column for the East Irish Sea Basin, highlighting the petroleum system and exploration play concepts in the basin (modified from UK Discovery Digest 2007). Source: The history of exploration and development of the Liverpool Bay fields and the East Irish Sea Basin, J. Bunce

KLW Gas Discoveries overview. Source: OilexLTD