REG - EnergyPathways PLC - Corporate Update

EnergypathwaysAnnouncement

16/01/2024 08:00

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RNS Number : 8347Z  EnergyPathways PLC  16 January 2024

 

 

16 January 2024

 

EnergyPathways plc

 

("EnergyPathways" or the "Company")

 

Corporate Update

 

EnergyPathways plc (AIM: EPP), an integrated energy transition company, is
pleased to provide the following update regarding its wholly owned and
operated Marram Field project (the "Marram Project") and strategic objectives
for 2024.

 

Investment Highlights

 

·    EnergyPathways was admitted to AIM on 20 December via a reverse
takeover transaction with Dial Square Investments plc

·    Proceeds of the £2m equity raise to be used to progress the Marram
Project to FID in 2024

·    The Marram Project is a fully appraised low emission gas field in the
UK Irish Sea containing up to 35.3 Bcf of undeveloped gas 2P Reserves and 11
Bcf of 2C Contingent Resources in high-quality reservoirs

·    The Marram Project has potential to be developed as a short cycle low
emission project with first production potentially as early as 2025

·    Focused strategy based around near-term, low emission gas development
and longer-term energy transition solutions

·    Supportive market drivers underpinned by the UK's prioritisation of
domestic gas to support Energy Security and Energy Transition to Net Zero

Strategic Milestones for 2024

 

In support of its strategic objectives, the Company is progressing a number of
interrelated commercial and technical workstreams in support of a Marram
Project FID , which the Directors of the Company anticipate may be as early as
in 6-9 months' time, as follows.

·    securing certain long lead items for development;

·    results from tie-back optimisation studies

·    pre-FEED and FEED completion;

·    Field Development Plan (FDP) Government approval;

·    Project FID;

·    Environmental Statement and approval;

·    arranging  development financing (debt and equity);

·    UKCS 33(rd) licensing application and]"Out of Round" licence
requests;

·    securing additional low emission gas resources; and

·    establishing low carbon technology partnerships

 

Recent Developments

 

The Company has secured a first right of refusal with a major subsea equipment
provider to purchase two subsea production trees. The Company is going to
progress with equipment certification and testing of the trees. This
arrangement will remove a major critical path item from the Marram Project
schedule, noting that the manufacture of new subsea trees in the industry is
estimated to take 18-24 months.

 

EnergyPathways submitted an interim Environmental Statement to OPRED for
consultation with relevant local, regional and national authorities and
favourable feedback was received from OPRED. Due to the high shipping levels
of the region, a  Navigation Risk Assessment is necessary and  will now be
undertakento prepare the project's final Environmental Statement for OPRED
approval, which is expected to take approximately two months. The Company
believes it is well positioned to meet the Environmental Statement approval
strategic milestone in line with its objectives.

 

In parallel with these operational milestones, management continues to assess
optionality with regards to the development financing of the Marram Project.
In this regard, the Company has received expressions of interest, including
term-sheet offers, and will seek to progress those discussions in the
near-term.  The attractive economics of the Marram Project, make the project
appropriate for debt financing, with management estimating that in the order
of 70% of the development capex could  be funded through such a facility.

 

With regard to business development, EnergyPathways awaits the result of its
33(rd) licensing round application for an additional licence,.  The Company
notes recent confirmation from the NSTA that it expects to announce the awards
of the 33(rd) Licencing Round during Q1 2024.

 

 

Commenting on the outlook, CEO Ben Clube said:

 

"With our AIM admission concluded a few weeks ago, our full focus has turned
towards the operational milestones that will define this year and generate
material long-term value for our stakeholders.  Our intention is to progress
the Marram Project towards FID and we are progressing the various commercial
and technical workstreams to achieve that critical value-catalyst.  The
economics of the project are very attractive and the fundamental market
drivers for the development of the Marram Project remain compelling - both of
which provide confidence that we will achieve FID in the timeframe set out
during the IPO process.

 

We are presently engaged in evaluating tie back options for the development
that best position the Company for the development of the broader regional
potential. We are in progressive discussions regarding development financing
arrangements and are encouraged by the reaction of counterparties who
recognise the strong cash flow profile and rapid payback of the project.  In
parallel, we continue to screen opportunities to build materiality and scale,
and hope to receive positive news in the coming months regarding the Marram
Project lookalikes that we have bid for in the 33(rd) licencing round, as we
seek to capitalise on our early mover advantage in UK Irish Sea, a region with
numerous undeveloped gas discoveries, existing infrastructure and  the
ability to support the UK's objectives in terms of Energy Security and
Transition.  We look forward to communicating our progress to the market as
we achieve the numerous core operational milestones set out today."

 

Strategic Overview

 

On 20 December 2023 the Company concluded its reverse take-over transaction
with Dial Square Investments plc, and IPO and was admitted to trading on AIM
as EnergyPathways plc, under the ticker EPP.

 

EnergyPathways was the only energy company admitted to AIM in 2023 and the
Board believes that this success, which was achieved despite extremely
challenging market conditions, reflects the substantial potential value that
the Company's strategy can create for its shareholders.

 

The macro factors that underpin the attractiveness of the Company's strategy
continue to develop favourably with ever-increasing recognition in the UK,
across Government, among regulators, energy consumers and the investment
community, all of which recognise the inescapable fundamental that UK domestic
gas will have a critical role to play in the UK's energy mix for decades to
come and that the expansion of the UK gas sector is essential to providing
energy security and delivering on the nation's net zero commitments.

 

EnergyPathways is well positioned to contribute to delivering on the
exceptional growth in this expanding energy arena both in the near term and
long term. The Company's foundation gas asset, the 100% owned Marram Project,
is a field that is fully appraised, "development ready" and has the potential
to generate high rates of return and significant value for shareholders in the
near term. The Company is targeting similar low emission energy assets for
development that can be dedicated to supplying the UK market with low emission
domestic gas, offsetting the significantly higher emissions of imported LNG,
and so provide the UK with much needed energy security, while also
contributing a more environmentally beneficial solution for the nation's
energy requirements.

 

The Company has a "first mover advantage" in the East Irish Sea region, a
region that has substantial overlooked low emission gas accumulations, based
on EnergyPathways' estimates, of over 2 Tcf. This region has significant
potential to integrate its untapped gas resources with energy transition
opportunities and energy infrastructure contained within the region. These
include the nearby hydrogen hubs, extensive carbon capture and storage
reservoir capacity under development. Regional gas production can also be used
to compliment the significant and currently under-utilised renewable wind
generating capacity of the region, by providing long duration energy storage,
hydrogen production and back up low emission powergen.

 

To this end, the Company is pleased to see that the UK Government continues to
progress its plans for UK licences for oil and gas projects in the North Sea
to be awarded annually in the future.

 

 

Enquiries:

 

 EnergyPathways                                        Tel: +44 (0)207 466 5000, c/o Buchanan (Financial PR)

Ben Clube  / Ben Hodges

                                                     Email : info@energypathways.uk

 Cairn Financial Advisers LLP (Nominated Adviser)      Tel: +44 (0)20 7213 0880
 Jo Turner / Louise O'Driscoll / Sandy Jamieson
 Optiva Securities Limited (Joint Broker)              Tel: +44 (0)20 3137 1903
 Christian Dennis / Daniel Ingram
 Global Investment Strategy UK Limited (Joint Broker)  Tel: +44 (0)20 7048 9000
 Callum Hill / James Sheehan
 Buchanan (Financial PR)                               Tel: +44 (0)207 466 5000
 Ben Romney / Barry Archer
Email: energy@buchanan.uk.com (mailto:energy@buchanan.uk.com)

 

For further information on EnergyPathways visit www.energypathways.uk and
@energy_pathways on X (formerly Twitter).

 

Forward Looking Statements

This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
timing and granting of regulatory and other third party consents and
approvals, uncertainties regarding the Company's or any third party's ability
to execute and implement future plans, and the occurrence of unexpected
events.

 

Actual results achieved may vary from the information provided herein as a
result of numerous known and unknown risks and uncertainties and other
factors.

 

 

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