United Oil & Gas plc has signed a €2.165 million conditional sale of its Selva gas interests in Italy assets to Prospex Energy plc.
RESERVES
United’s subsidiary holds a 20% non-operated interest in the Podere Gallina licence, containing the gas development project, in the Po Valley region.
Prospex will acquire 100% of the subsidiary, effective from 1 January 2021, adding a further 20% interest in the Selva gas field and taking the company’s total holding to 37%.
Prospex said that the transaction would add 2.7 billion cubic feet (bcf) of 2P gas reserves to its portfolio and increase its share in Selva’s 2P gas reserves to 5bcf.
For the year ended 31 December 2020, United’s subsidiary reported a pre-tax loss of €36,934 and had total assets of €2,061,620.
PROCEEDS
United will receive an immediate deposit of €108,235 with the remainder payable on completion.
United will use the proceeds and those from the UK Central North Sea sale for its oil and gas production assets in Egypt and the Greater Mediterranean area, and exploration in the Caribbean and Latin America.
The company added it expected the transaction to be completed in late 2021, subject to approval of the Italian authorities.
OPPORTUNITIES
Prospex, which focuses on natural gas opportunities in Europe, said that Selva was due to start producing by Q2 2022.
Chief executive Mark Routh said that the transaction also increased the company’s share in the “multiple follow-up opportunities” on the Podere Gallina licence.
“These include the two historic gas producing North Flank and South Flank reservoirs at Selva, which CGG Services (UK) Ltd has estimated have a 60% – 70% chance of holding gross contingent resources (‘2C’) of 14.1 bcf, and the East Selva, Fondo Perino, Cembalina, and Riccardina prospects, which are estimated to hold aggregate gross prospective resources (best estimate) of 91.5 bcf.
“While our immediate focus is on Selva, there is much more to go for at Podere Gallina in the medium term.
“With gas production at Selva set to commence in Q2 2022, Prospex is well placed to play its part in the European energy transition.”