UK Onshore Field Proves a Gem for Angus
UK independent producer Angus Energy's onshore Saltfleetby gasfield has proved to be a "gem" following analysis of its reserves by Oilfield International, it said March 5. Shareholders can expect a clear return of £25 ($32)mn from a £1.5mn investment, according to calculations.
The mean sales gas reserves are estimated at 16bn ft³ net to Angus, which has a 51% stake, it said. Also forming part of mean reserves are 97,000 barrels of condensate, again net to Angus. The total cash flow after costs but before taxes of these reserves is £50mn at prices derived from the gas forward curve from ICE exchange and an average forward condensate price of $42/barrel. Oilfield International has also assigned mean contingent resources of 10bn ft³.
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Drilling a horizontal sidetrack to an existing well in the first half of next year will cost about £1.5mn, but gas can be brought on stream this year, with no other capital expenditure needed. The company might decide to spend more from 2022 to monetise the contingent resources, it said.
Allowing for capital and operating expenditure, taxation, cost of capital. abandoment costs and a gas grid connection, the resulting mean value of the reserves to Angus shareholders, which is also the central case, is just over £25mn, with a high case of £35mn and a low case of £16.7mn.
CEO George Lucan said: "This is clearly a gem of an asset and a just reward to loyal shareholders. We look forward to converting these reserves into clear cash and positive cashflows whilst keeping open the possibility of further substantial upside from the contingent resources. The exercise has been immensely useful for Angus management in identifying opportunities within the field as well as planning for connection and long-term operation. We are very grateful to Oilfield International for their hard work."
The nearly-depleted gas field had been a candidate for conversion into a gas storage facility under a series of prospective developers, but the market economics worked against the project. It might however have potential as a carbon sequestration site, Lucan told NGW last summer.