Reabold Resources plc has invested a further 20.4% of shares for £700,000 in the operator of the onshore West Newton development, Rathlin Energy (UK) Ltd.
SIDETRACK
The acquisition from Rathlin’s owner Calgary-based Connaught Oil & Gas Ltd will result in Reabold holding a 69.9% economic interest in PEDL183 via its 79.8% shareholding in Rathlin.
Rathin has a 66.67% interest in the East Yorkshire licence while Reabold additionally has a 16.665% direct licence interest.
The company noted that in the 12 months ended 31 December 2023, Rathlin reported a net loss of £851,286.
Revised phased work for West Newton, approved by the North Sea Transition Authority, includes re-entry and recompletion or sidetrack one of the currently suspended wells on or before 30 June 2026.
The joint venture will also re-enter and recomplete or sidetrack one of the remaining suspended wells or drill and complete a new deviated or horizontal well on or before 30 June 2027.
A field development plan will be submitted on or before 30 June 2027.
Reabold said that the operator had applied to carry out a “reservoir stimulation” on the existing West Newton West Newton A-2 well, to fully de-risk the subsurface characteristics of the project at limited cost.
The company added that CNG Services Ltd’s gas export feasibility study stated that an initial single well development and gas export plan could accelerate production and cash flow with limited capital expenditure.
The proceeds would allow the partners to drill future wells before field development.
Following drilling and testing of the horizontal well, first gas is expected after 18 months with development costs estimated at around £12 million.
“We are thrilled to be further increasing our interest in Rathin as it delivers the upcoming work programme, which would de-risk the West Newton development plans,” said co-chief executive Sachin Oza.
“Furthermore, Reabold will also be increasing its exposure to the broader PEDL183 licence area which, we believe, has significant running room beyond West Newton, and on highly attractive terms.”