United Oil & Gas plc has terminated the £5.7 million conditional sale of the Maria discovery and will withdraw from the central North Sea licence on its expiry at the end of this month.
EXHAUSTED
The company has several times extended the long stop date for Quattro Energy Ltd’s purchase of P2519, which depended on its own acquisition by Jesmond Capital.
United today said that transfer of the licence had received regulatory approval, but following Quattro’s failure to raise the necessary money, the parties had not agreed a further extension.
The company added it had “exhausted all other available avenues” to progress the licence and decided against applying to move into its next phase beyond the expiry date of 30 November.
United would have needed to make a firm commitment to drill a well to continue the licence.
As at 30 June 2023, United carried an intangible balance of $1 million representing the amount capitalised to that date on the Maria discovery.
DISAPPOINTING
Chief executive Brian Larkin said that United’s focus remained on progressing the farm-out of its Jamaica licences and drilling activities in Egypt.
“Over recent years, we have successfully monetised our interests in licences in both the North Sea and in Italy, using the proceeds to fund our activities in Jamaica, the North Sea and also corporate G&A [general and administrative].
“We had identified our interest in the Maria licence as non-core to our future strategy and on that basis undertook a farmout process which resulted in the agreement to sell to Quattro on the terms announced in January this year.
“Since signing this agreement with Quattro, we have sought to support their efforts to raise the funds required to complete this transaction and had regular interaction with the Quattro team and their advisors as they progressed their funding process.
“It is therefore a disappointing outcome for both parties, that due to the challenging regulatory and fiscal backdrop in the North Sea, Quattro were unable to complete their funding process.
“Throughout the last 12 months, the company has incurred only licence costs in relation to the Maria licence, the cost of which is effectively covered by the $100k non-refundable deposit received in September.”
United first entered a £3.2 million sale agreement with Quattro in September 2021 and extended the deadline before cancelling the agreement on evaluation of the assets.
In January of this year, United signed a new £5.7m deal which was followed by three extensions of which the most recent was in October.