REG - Reabold Resources - Further investment in Rathlin Energy

Reabold ResourcesAnnouncement

12/12/2024 07:00

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RNS Number : 7725P  Reabold Resources PLC  12 December 2024

 

12 December 2024

Reabold Resources plc

 

("Reabold" or the "Company")

 

Further investment in Rathlin Energy (UK) Limited ("Rathlin") and Forward Work
Plan

 

Reabold Resources plc, the investing company focussed on developing strategic
gas projects for European energy security, is pleased to announce that it is
has agreed to acquire 20.4% of the shares in Rathlin (the "Transaction") from
Connaught Oil & Gas Limited ("Connaught") for a total cash consideration
of £700,000, subject to approval from Connaught shareholders. This will take
Reabold's total shareholding in Rathlin to approximately 79.8%.

 

Rathlin is operator of the PEDL183 Licence on the West Newton gas development,
located onshore UK in East Yorkshire. Upon completion of the Transaction,
Reabold will hold a ca. 69.9% economic interest in West Newton and PEDL 183
via its ca. 79.8% shareholding in Rathlin, which, in turn, has a 66.67%
interest in PEDL 183. In addition, Reabold has a 16.665% direct licence
interest in PEDL 183. In the 12 months ended 31 December 2023, Rathlin
reported a net loss of £851,286.

 

West Newton is the largest undeveloped onshore gas field in the UK, located
near to infrastructure and a gas hungry industrial base. As announced on 13
June 2024, the pre-tax NPV(10) of the West Newton project was calculated to be
US$179 million net to Reabold under the full field development plan.

 

West Newton phased development programme

 

·      The North Sea Transition Authority ("NSTA") has approved a
revised work programme for PEDL 183 to:

o  Re-enter and recomplete or sidetrack one of the currently suspended wells
on or before 30 June 2026;

o  Re-enter and recomplete or sidetrack one of the remaining suspended wells
or drill and complete a new deviated or horizontal well on or before 30 June
2027; and

o  Submit a field development plan on or before 30 June 2027.

 

·    Rathlin, as the operator, has applied to carry out a reservoir
stimulation on the existing West Newton West Newton A-2 well.

o Reabold believes this to be a key step in fully de-risking the subsurface
characteristics of the project at limited cost.

 

·      A Gas Export Feasibility study, completed by CNG Services
Limited, concluded that, as a precursor to the intended West Newton full field
development, an initial single well development and gas export plan can
accelerate production and cash flow whilst requiring limited capital
expenditure, giving the joint venture ("JV") partnership the ability to drill
future wells out of cash flow.

o  The single well development plan benefits from early cash generation with
the ability to drill future wells out of cash flow. Following drilling and
testing of this horizontal well, first gas is expected after 18 months with an
associated development capex estimated to be ca. £12 million.

o  New initial phase, based upon a single well development, materially
reduces the financial hurdle to reach production and retains the potential for
full development.

 

 

Sachin Oza, Co-CEO of Reabold, commented: "We are thrilled to be further
increasing our interest in Rathin as it delivers the upcoming work programme,
which would de-risk the West Newton development plans. Furthermore, Reabold
will also be increasing its exposure to the broader PEDL 183 licence area
which, we believe, has significant running room beyond West Newton, and on
highly attractive terms.

 

"The UK budget has provided much needed fiscal clarity and against this more
stable backdrop, we are confident in our ability to progress the West Newton
work programme and bring this important UK gas asset to the next stage of
development and monetisation. As the energy transition in the UK moves
forward, the economic, fiscal, energy security and environmental case for
using indigenous gas has never been stronger."

 

 

 

For further information, contact:

 

 Reabold Resources plc                                     c/o Camarco

 Sachin Oza                                                +44 (0) 20 3757 4980

 Stephen Williams

 Cavendish - Nominated & Financial Adviser and Broker       +44 (0) 20 7220 0500

 Neil McDonald

 Pearl Kellie

 Camarco                                                   +44 (0) 20 3757 4980

 Billy Clegg

 Rebecca Waterworth

 Sam Morris

 

Notes to Editors

 

Reabold Resources plc has a diversified portfolio of exploration, appraisal
and development oil & gas projects. Reabold's strategy is to invest in
low-risk, near-term projects which it considers to have significant valuation
uplift potential, with a clear monetisation plan, where receipt of such
proceeds will be returned to shareholders and re-invested into further growth
projects. This strategy is illustrated by the recent sale of the undeveloped
Victory gas field to Shell, the proceeds of which are being returned to
shareholders and re-invested.

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