Reabold Resources is delighted to announce that Corallian Energy has entered into a letter of intent (LOI) with UK based drilling contractor Ensco U.K. Ltd for the provision of a jack-up drilling unit to drill its Colter and Wick wells. Within the LOI the parties have agreed, subject to approvals and consents, headline terms for a suitable unit to conduct drilling operations in Q3/4 2018.
Sachin Oza, Co-CEO of Reabold Resources, commented:
"We are extremely pleased with the progress made within the Corallian portfolio since we cornerstoned its fundraise last year. The Colter and Wick prospects have both attracted farm-ins on attractive commercial terms and we look forward to the drilling of both of these transformational wells in the next few months."
Since Reabold's initial investment in Corallian Energy Limited (Corallian), becoming its cornerstone investor last November, substantial progress has been achieved within the portfolio of UK nearshore licenses:
- Nov 2017: Upland Resources and Corfe Energy farm into the Wick prospect, resulting in Corallian's interest being partially carried for the initial exploration well.
- Jan 2018: United Oil & Gas farms into the Colter prospect, paying a cash equivalent to 13.33% to earn a 10% interest.
- Feb 2018: Baron Oil acquired a part of Corfe Energy's position in Wick agreeing to pay 20% of the well costs to earn a 15% interest in the licence.
- March 2018: Baron Oil farms into the Colter prospect, paying 6.67% to earn a 5% interest.
- March 2018: Corallian completes further fundraise at premium valuation to Reabold's initial investment.
This leaves Corallian fully funded to drill Colter, with an estimated 30 million bbls gross recoverable resources*, at a 51.67% equity interest, and Wick, with an estimated 23 million bbls gross recoverable resources*, at a 40% interest.
In addition, the Oulton appraisal project continues to be progressed with a CPR underway, potentially providing an additional and compelling third leg to Corallian's portfolio of UK assets.
This value-enhancing activity within the Corallian portfolio following the Company's intital investment validates Reabold's corporate strategy of providing capital to unlock undervalued pre-cash flow assets.
Stephen Williams, Co-CEO of Reabold Resources, commented:
"With the industry having been capital constrained for several years, we see an abundance of high impact projects available to Reabold. Furthermore, with commodity prices rising and costs still very low following the oil industy downturn, project economics are increasingly compelling. There is a rare opportunity to deliver outsized returns when capital is applied to the right projects over the coming months".
*Corallian management estimate of mean recoverable resource
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/15052018/reabold-resources-plc-provides-update-on-colter-and-wick-projects/