Oil & Gas Corporate News
The UK has launched Britain’s 26th offshore oil and gas licensing round, offering acreage around the British Isles. In a bid to entice producers into deep Atlantic waters that are believed to hold a fifth of the UK’s remaining oil and gas reserves, a tax allowance worth up to £160m per field will be available for developments in the remote region west of Shetland.
Afren (AFR, 101.5p, ?4.4%) has entered into a Joint Venture Agreement with Oriental Energy Resources Limited and Energy Equity Resources for participation in the exploration, appraisal and development of OML 115 offshore South East Nigeria, adjoining the Ebok and Okwok development area. Afren has identified significant exploration potential with gross mean resources potential estimate of 270MMbbl. Afren will acquire a 32.5% interest for a total upfront cash cost of US$6m including signature bonus and license extension fees, in addition to the requirement to drill one firm exploration well at an estimated cost of US$30m. Drilling will commence with one exploration well scheduled for H2 2010.
Xcite Energy (XEL, 52.0, ?13.0%) has concluded an agreement with BP Oil International Limited whereby BPOI will provide the offtake services to market and sell the Bentley crude oil in return for an incentive-based fee per barrel. The offtake fee is directly related to the realised price achieved by BPOI for the Bentley crude oil in relation to the prevailing Brent crude price, incentivising BPOI to maximise the price per barrel achieved for XER by minimising the discount to Brent crude. In addition, BPOI have undertaken that, subject to certain conditions, when Xcite Energy move to full field development, an associated BP company will procure US$20m of financing from a commercial bank for Xcite Energy with credit support from BP, for the purpose of assisting with the full field development of the Bentley field, the terms of which will be negotiated in due course
Tower Resources (Hold, 3p target price) (TRP, 4.5p, ?2.8%) has completed the preparation of the Avivi-1 well site and drilling camp in Uganda Exploration Area 5 and is awaiting the release of the land rig currently contracted to Tullow Oil plc. The rig has finished drilling the successful Kasamene-2 well but due to operational delays in the completion of the well, the rig is now expected to be released on 31 January and will be moved to the Avivi-1…
