REG - Reabold Resources - Offer for Corallian and acquisition of licences

Reabold ResourcesAnnouncement

04/05/2022 07:00

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RNS Number : 2004K  Reabold Resources PLC  04 May 2022

04 May 2022

 

Reabold Resources plc

 

("Reabold" or the "Company")

 

 

Conditional, non-binding offer for Corallian and conditional acquisition by
Reabold of exploration and appraisal licences

 

 

Highlights:

 

·    Corallian Energy Limited ("Corallian") has received a non-binding,
conditional offer from a credible party for the acquisition of its entire
issued share capital (the "Potential Sale")

 

·   Corallian's board considers the Potential Sale to be sufficiently
attractive to seek to conclude a sale process and is progressing negotiations
with the potential purchaser

 

·    Reabold to acquire Corallian's portfolio of six attractive
exploration and appraisal licences, excluding the Victory licence, for
£250,000 (the "Acquisition")

o  Significant prospective and contingent resources

o  Opportunity to de-risk, then monetise prospects

o  Low work programme commitments

o  Corallian's only remaining asset, at the time of completion of the
Acquisition, will be licence P2596 (containing the Victory gas development
opportunity)

 

·     Reabold is a 49.99% shareholder in Corallian

 

Reabold, the AIM quoted investing company which focuses on investments in
upstream oil and gas projects, is pleased to announce that, as part of the
ongoing strategic review of Corallian, as announced on 20 October 2021,
Corallian has received a non-binding offer from a credible party for the
Potential Sale. The Board of Corallian is progressing negotiations with the
potential purchaser, including the purchaser finalising its due diligence
process. The Corallian board of directors currently considers the offer
sufficiently attractive for all shareholders to commence a sale process. A
further update will be provided in due course.

 

Reabold is a 49.99% shareholder in Corallian. As part of the Potential Sale
process, Reabold is pleased to announce that it has entered into a conditional
sale and purchase agreement ("SPA") to acquire Corallian's working interest in
all the non-Victory licences within the Corallian portfolio for a cash
consideration of £250,000, which is immediately payable (subject to
adjustment) ("Cash Consideration"). The licences that will be acquired are
P2396, P2464, P2493, P2504 and P2605 (all at 100% working interest) and P2478
(36% working interest). Accordingly, at the time of completion of the
Acquisition and the Potential Sale, Corallian's only remaining asset will be
licence P2596, which contains the Victory gas development opportunity. Reabold
will become Licence Administrator but does not intend to become Licence
Operator and will therefore seek appropriate farm-out opportunities with third
party operators following completion of the Acquisition, in order to de-risk
and monetise the prospects.

 

The Acquisition is conditional, inter alia, upon (1) Corallian receiving
notice from the purchaser that the Potential Sale may proceed to completion
and (2) approval from the North Sea Transition Authority. If the Acquisition
does not complete before 31 August 2022, either party may terminate the SPA
and Corallian will be required to repay the Cash Consideration to Reabold
within 90 days.

 

 

Summary of Key Licences:

 

P2605 (100%)

The licence is located West of Shetland, northwest of the Victory licence
(P2596) and contains the Laxford gas discovery, made in 1984 by British Gas
well 214/30-1, which flowed 17.5 mmscfg / day from the Palaeocene Vaila
Sandstone.

 

The licence also contains the Scourie prospect, a Palaeocene Vaila Sandstone
target exhibiting a seismic amplitude anomaly similar to that seen at the
nearby Glenlivet gas field.

 

The P50 prospective recoverable resource of Laxford is 68*( )bcfe, and for
Scourie is 90(*) bcfe.

 

P2478 (36%)

The licence is located in the Inner Moray Firth and contains the Dunrobin
Prospect. The primary reservoir intervals are sandstones of the Beatrice
Formation and Dunrobin Bay Group and the reservoir quality of these formations
in nearby wells is good to excellent. A potential secondary reservoir is
provided by Triassic Lossiehead Formation sandstone.

 

The estimated P50 prospective recoverable resource is 115(*) mmboe gross.

 

It is worth noting that the Dunrobin Prospect is located in shallow water,
with shallow target depths and consequently drilling costs are expected to be
relatively low.

 

P2464 (100%)

The licence is located in the East Shetland Basin and contains the Unst gas
prospect, an Eocene Frigg sandstone prospect which exhibits a seismic
amplitude anomaly similar to that observed at the nearby Nuggets Fields.

 

The estimated P50 prospective recoverable resource volume is 68(*) bcfe,
located within 30km of gas infrastructure.

 

The licence also contains the Quoys prospect, a Jurassic structural /
stratigraphic trap up dip of the 3/19b-2 oil discovery.

 

P2504 (100%)

The licence is adjacent to licence P2464 in the East Shetland Basin and
contains the Oulton oil discovery, drilled by Amoco in 1974 in the 3/11-1 and
side-track 3/11-1ST wells.  Light oil was tested from the Jurassic Emerald
sandstones contained within a fault block trap as imaged on 3D seismic data.

The discovery is estimated to contain 10-19 million barrels of oil recoverable
(1C to 3C Contingent Resources), based upon a Schlumberger CPR completed in
2018.

The block also contains the Oulton West prospect, a stratigraphic trap at the
Emerald level, which is up-dip and potentially connected to the Oulton
discovery via a structural saddle mapped in the south-eastern limit of the
prospect.

In addition, the Oulton West prospect is overlain by an Eocene-aged Frigg
sandstone gas prospect exhibiting a direct hydrocarbon indicator (DHI) in the
form of an amplitude anomaly which conforms to structure at the mapped top
reservoir horizon.

 

Sachin Oza, co-Chief Executive Officer of Reabold, commented:

"This is potentially a very exciting transaction for Reabold. As part of the
Corallian strategic review, which has reached the stage of a non-binding,
conditional offer for Corallian based on its Victory asset, we have agreed to
acquire six licences from Corallian. Four of the licences in particular have
significant prospective potential in addition to the de-risked contingent
resources associated with Oulton, which we believe, can be progressed in a
low-cost manner given, inter alia, the low spending commitments."

"We look forward to providing further updates in the weeks ahead."

 

Regulatory Information

Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and
Gas Companies, the technical information contained in this announcement has
been reviewed by Dr Jeremy Jarvis as a Qualified Person.

 

Jeremy has more than 35 years' experience as a petroleum geologist, holds a
BSc in Geology from the University of Dundee and a Ph.D. from Imperial
College, University of London. He is a member of the American Association of
Petroleum Geologists and the Petroleum Exploration Society of Great Britain.

This Announcement contains inside information for the purposes of the UK
version of the market abuse regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").

 

 

For further information, contact:

 

 Reabold Resources plc                                      c/o Camarco

 Sachin Oza                                                 +44 (0) 20 3757 4980

 Stephen Williams

 Strand Hanson Limited - Nominated & Financial Adviser      +44 (0) 20 7409 3494

 James Spinney

 Rory Murphy

 James Dance

 Stifel Nicolaus Europe Limited - Joint Broker              +44 (0) 20 7710 7600

 Callum Stewart

 Simon Mensley

 Ashton Clanfield

 Panmure Gordon - Joint Broker                              +44 (0) 207 886 2733

 Hugh Rich

 Camarco                                                    +44 (0) 20 3757 4980

 James Crothers

 Billy Clegg

 Rebecca Waterworth

 

 

 

Notes to Editors

 

Reabold Resources plc is an investing company investing in the exploration and
production ("E&P") sector. The Company's investing policy is to acquire
direct and indirect interests in exploration and producing projects and assets
in the natural resources sector, and consideration is currently given to
investment opportunities anywhere in the world.

 

As an investor in upstream oil & gas projects, Reabold aims to create
value from each project by investing in undervalued, low-risk, near-term
upstream oil & gas projects and by identifying a clear exit plan prior to
investment.

 

Reabold's long term strategy is to re-invest capital made through its
investments into larger projects in order to grow the Company. Reabold aims to
gain exposure to assets with limited downside and high potential upside,
capitalising on the value created between the entry stage and exit point of
its projects. The Company invests in projects that have limited correlation to
the oil price.

 

Reabold has a highly-experienced management team, who possess the necessary
background, knowledge and contacts to carry out the Company's strategy.

 

 

* Corallian Management Estimate

 

 

 

 

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