REG - Reabold Resources - Operational Update & Share Buyback
28/04/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230428:nRSb7854Xa&default-theme=true
RNS Number : 7854X Reabold Resources PLC 28 April 2023
28 April 2023
Reabold Resources plc
("Reabold" or the "Company")
Corporate & Operational Update
Commencement of Share Buyback Programme
Reabold Resources plc, the oil & gas investing company with a diversified
portfolio of exploration, appraisal and development projects, announces a
corporate and operational update covering the West Newton PEDL 183 licence and
four of the North Sea offshore licences, and the commencement of a share
buyback programme of up to £750,000.
Key points
· PEDL 183 licence update:
· JV partnership agreed specific well path for West Newton B-2 well
· Potentially highly significant discovery in Crawberry Hill, part of
the PEDL 183 licence and previously drilled by Rathlin Energy Limited
("Rathlin") in 2013
· Rathlin to potentially bring in an industry partner to support
licence activity, with West Newton B-2 drilling targeted for H2 2023, subject
to final regulatory approvals and rig availability
· Reabold could provide additional funding solution for Rathlin upon
receipt of the second tranche of net proceeds from the sale of Victory
· CPR published on four of the Reabold North Sea licences; follows the
announcement and publication of a CPR in February 2023 on licence P2478, which
includes the Dunrobin West prospect and confirmed significant resource
potential
· Initiation of share buyback programme of up to £750,000 to commence
on 28 April 2023
West Newton PEDL 183 licence UPDATE
WN B-2 well
The joint venture partnership at PEDL 183 has continued to analyse the
geophysical, petrophysical and test data from the West Newton A and B wells in
preparation for drilling. The data analysis has already confirmed the
likelihood of intersecting good reservoir quality that, when taken in
conjunction with the optimised drilling and completion methods, is expected to
deliver good well productivity from a horizontal well from the B site ("WN
B-2") and, as such, the JV partnership has committed to the specific,
optimised well path for WN B-2. It is envisaged that WN B-2 will be followed
by a multi-well development programme based on a 50 Mscf/d gas facility.
Potentially highly significant existing discovery in Crawberry Hill, part of
the PEDL 183 licence, in the Zechstein play region
Alongside the development plans for the West Newton A and B wells, Reabold has
continued to appraise other opportunities within the PEDL 183 licence. Reabold
has undertaken a technical review of its Zechstein play prospectivity in the
UK, including the licences acquired through the Simwell transaction and PEDL
183, combining the significant quantity of seismic data, historical wells,
core analysis and other proprietary data and analysis assembled by the
Company.
Through this analysis, Reabold has identified on PEDL 183 a significant
potential discovery, Crawberry Hill, which was drilled by Rathlin in 2013. The
Company's priority now is to develop plans with the aim of making this a
drill-ready appraisal opportunity. This could add materially to the already
significant resource within PEDL 183 offered from the West Newton trend. The
Crawberry Hill-1 well, drilled in 2013, intersected 141m of Kirkham Abbey
Formation with good indications of gas shows and porosity. The well was
originally drilled to test a deeper target and does not have a full suite of
logs over the Kirkham Abbey interval.
ERC Equipoise Ltd (ERCE) has undertaken a petrophysical analysis of the
conventional reservoir of the Kirkham Abbey formation in the Crawberry Hill
and Risby-1 wells and interprets average porosities greater than 15% in the
top 20m of the Kirkham Abbey formation in Crawberry Hill-1. ERCE also
interprets probable gas saturations in the top 6m of the Kirkham Abbey
formation in the Crawberry Hill-1 well.
The Risby-1 well was drilled in the water leg but good porosity was calculated
from the well logs and the potentially very good permeability indicated from
well cuttings, which is supported by a drill-stem test in the Kirkham Abbey
Formation. Detailed seismic mapping is underway to define the extent of the
Crawberry Hill accumulation, which could add materially to the already
significant resource within PEDL 183 offered from the West Newton trend.
In conclusion, Reabold believes the apparent discovery at Crawberry Hill to be
an exciting appraisal opportunity potentially significantly enhancing the
already strategic asset that is PEDL 183.
Given the significant technical analysis that has been completed to date,
culminating in the JV partnership agreeing the well path for WN B-2 and the
emergence of the Crawberry Hill opportunity, and in line with prudent risk
management, Rathlin has decided to reduce its significant working interest
position in PEDL 183 with the aim of potentially bringing in an industry
partner to participate in drilling on PEDL 183.
Rathlin holds a 66.67% licence interest in and is operator of PEDL 183.
Reabold has a ca. 56% economic interest in PEDL 183 via its 16.665% direct
licence interest and through its ca. 59% equity ownership of Rathlin. Reabold
is sufficiently funded for its 16.665% direct share of the costs for this well
with its existing cash resources.
Should Rathlin's efforts to reduce their working interest position not fully
meet their objective, Reabold could provide additional funding for Rathlin
upon receipt of the second tranche payment from Shell relating to the sale of
the Victory asset, which would allow WN B-2 to be drilled at the earliest
opportunity, subject to Environment Agency permit approvals and rig
availability. The exact timing and amount of the second tranche payment
from Shell is currently uncertain, however the second tranche payment will be
ca. £9.5 million, assuming the development and production consent for the
Victory gas field is secured from the North Sea Transition Authority by 1
December 2023. If consent has not been received by this date, then Reabold
expects to receive £5.2 million within 3 business days of this date, with the
balancing payment to come at a later consent date. The net proceeds to be
received by Reabold would be sufficient to meet Rathlin's share of the
drilling costs of WN B-2, leaving Reabold financial flexibility for its
capital allocation strategy of balancing portfolio investment with shareholder
returns.
CPR on Reabold's Northern North Sea Assets
A Competent Person's Report ("CPR") prepared by RPS Group ("RPS") on four of
Reabold's UK North Sea licences is available on its website at the following
link: www.reabold.com/investor-relations/reports-and-presentations/
(http://www.reabold.com/investor-relations/reports-and-presentations/) . The
CPR covers licences P2464, P2504 and P2605, in which Reabold has a 100%
working interest, and licence P2478, in which Reabold has a 36% working
interest. A P2478 (the Dunrobin complex) specific CPR was announced on 16
February 2023 and is also contained within today's published CPR. Reabold
acquired these strategic off-shore North Sea licences from Corallian Energy
for £250,000, as announced on 4 May 2022.
The CPR has been prepared in accordance with the June 2018 Petroleum Resources
Management System ("SPE PRMS") as the standard for reporting. The key points
from the CPR and a summary of the gross and net technically recoverable
prospective resources are set out below.
· CPR highlights the potential across all of Reabold's key central and
northern North Sea assets, namely: the Inner Moray Firth, East Shetland Basin
and the North West of Shetland
· The opportunities comprise a number of play types of both gas and oil
with proven potential from analogue fields
· Confirmed material contingent resources at Oulton of 11 mmbbls (2C)
with an associated NPV (10) at 30 September 2022 of £59 million(1)
· Mean Estimate aggregate(2) of unrisked net prospective oil resources
is 148.5 mmbbls and Mean Estimate aggregate(2) of unrisked net prospective gas
resources is 211.6 bcf or ca. 36.5 mmboe(3)
· The Company believes that the CPR supports the ongoing farmout and
marketing process for Reabold's North Sea assets
_________________________
1 Based on RPS assumptions.
2 The unrisked aggregation was performed by the Company and assumes that all
prospects at all levels are successful.
3 The CPR reports oil and gas Prospective Resources. The oil equivalent value
of the gas resources has been estimated by the Company using a factor of
5.8bcf per mmboe.
The table below summarises RPS's independent assessment of the Prospective
Resources, from which are derived the net technically recoverable Prospective
Resources attributable to Reabold's working interest, as derived from the CPR
which has an effective date of 30 September 2022.
Prospective Resources Gross Attributable to Licence(a) Net Attributable to Reabold(a) Risk Factor
Low Estimate Best Estimate High Estimate Mean Estimate Low Estimate Best Estimate High Estimate Mean Estimate
(1U) (2U) (3U) (1U) (2U) (3U)
Technically recoverable resources - Oil (mmbbl)
Dunrobin West Jurassic 7 42 168 71 2 15 60 25 34%
Dunrobin West Triassic 7 34 98 45 2 12 35 16 12%
Dunrobin C&E Jurassic 1 8 67 22 0.4 3 24 8 31%
Dunrobin C&E Triassic 1 9 56 22 0.4 3 20 8 14%
Golspie Jurassic 4 12 27 14 1 4 10 5 27%
Golspie Triassic 7 20 43 23 3 7 15 8 12%
Total P2478 Oil (mmbbl) (b) 197 70
Quoys 17 36 67 39 17 36 67 39 20
Baliasta 0.6 1.4 2.4 1.5 0.6 1.4 2.4 1.5 44
Total P2464 Oil (mmbbl)(b) 40.5 40.5
Oulton West Jurassic 13 32 70 38 13 32 70 38 30%
Total P2504 Oil (mmbbl) (b) 38 38
Total Oil (mmbbl) (b) 275.5 148.5
Technically recoverable resources - Associated & Non-associated Gas (bcf)
Dunrobin West Jurassic 2 7 22 10 0.9 3 8 4 34%
Dunrobin West Triassic 1 4 11 5 0.3 1 4 2 12%
Dunrobin C&E Jurassic 0.1 1 7 2 0.04 0.3 3 1 31%
Dunrobin C&E Triassic 0.1 1 6 2 0.04 0.4 2 1 14%
Golspie Jurassic 0.4 1 3 2 0.1 0.5 1.1 0.6 27%
Golspie Triassic 0.8 2 5 3 0.3 0.8 1.7 1.0 12%
Total P2478 Gas (bcf) (b) 24 9.6
Quoys 2 5 9 5 2 5 9 5 20
Baliasta 5 10 17 10 5 10 17 10 44
Unst Combined 5 19 74 33 5 19 74 33 42
Unst South Cluster 4 6 8 6 4 6 8 6 31
Total P2464 Gas (bcf) (b) 54 54
Oulton West Jurassic 4 10 24 13 4 10 24 13 30
Oulton West Frigg 8 12 18 13 8 12 18 13 47
Total P2504 Gas (bcf) (b) 26 26
Scourie 37 87 178 99 37 87 178 99 17
Channel 1 - Laxford 2 5 9 5 2 5 9 5 9
Channel 2 - Laxford 3 6 12 7 3 6 12 7 9
Channel 3 - Laxford 3 7 14 8 3 7 14 8 9
Channel 4 - Laxford 1 2 4 3 1 2 4 3 9
Total P2605 Gas (bcf) (b) 122 122
Total Gas (bcf) (b) 226 211.6
Notes:
(a) "Gross Attributable" are 100% of the resources attributable to the licence
whilst "Net Attributable" are those attributable to Reabold's effective
interest in the licence before economic limit test.
(b) Pmean totals are by arithmetic summation (in-house).
COMMENCEMENT OF SHARE BUYBACK PROGRAMME
Reabold is pleased to announce the launch of a share buyback programme (the
"Programme"), in accordance with the authority granted by shareholders at the
Company's General Meeting on 28 February 2023.
As announced on 31 October 2022, Reabold stated that it intends to return £4
million of excess cash to Reabold shareholders upon receipt of the final £9.5
million net to Reabold from Shell, relating to the sale of the Victory asset.
However, the Company has decided to accelerate the timing of a portion of this
return by commencing an initial share buyback programme for a maximum amount
of £750,000. Reabold's Board evaluates many investment opportunities
consistent with its investing policy and believes that the current market
value of the Company's ordinary shares makes the buyback an attractive
investment. Furthermore, the quantum of the buyback programme has been set by
the Board after having considered the current capital position and future
capital needs of the Company, such that it retains financial flexibility
whilst maintaining an efficient balance sheet.
The Board will keep the Programme under review to ensure that it continues as
an efficient and effective means of generating value for Reabold shareholders.
While the Company has launched the Programme, there is no certainty on the
volume of shares that may be acquired, nor any certainty on the pace and
quantum of acquisitions.
Reabold will evaluate the mechanism of the intended return of the remaining
£3.25 million upon receipt of the £9.5 million payment from Shell, with
consideration to, inter alia, prevailing market conditions at that time.
The Company has entered into a buyback agreement with Stifel Nicolaus Europe
Limited ("Stifel"), which will conduct the Programme and repurchase Reabold's
ordinary shares of 0.1 pence each ("Ordinary Shares") on Reabold's behalf for
a maximum amount of £750,000 worth of Ordinary Shares. During any closed
periods of the Company, the buyback agreement will grant Stifel the authority
to enact purchases of Ordinary Shares and make trading decisions concerning
the timing of the purchases under the Programme independently of the Company.
The purpose of the Programme is to reduce the issued ordinary share capital of
Reabold.
The Programme will be conducted within certain pre-set parameters in
accordance with the Company's general authority granted to the Company at its
General Meeting on 28 February 2023. In line with the authority, the Programme
will not exceed acquisitions of more than 2,294,346,977 Ordinary Shares
(representing approximately 25 per cent. of the Company's issued ordinary
share capital). Share purchases will be carried out on the London Stock
Exchange. The average daily volume figure acquired under the Programme will
be no more than 25% of the average daily volume traded in the 20 trading days
preceding the date of purchase, and no more than 6 million Ordinary Shares in
any one day.
Any Ordinary Shares acquired under the Programme shall be at a maximum price
(excluding expenses) of the higher of: (i) 10% above the average of the middle
market quotations for an Ordinary Share as derived from the AIM Section of the
Daily Official List of the London Stock Exchange for the five business days
before the date on which the contract for the purchase is made; and (ii) an
amount equal to the higher of the price of the last independent trade and
current independent bid as derived from the London Stock Exchange trading
system.
The Ordinary Shares repurchased will be held in Treasury, to meet the
obligations from employee share option programmes or other allocations of
shares to employees of the Company, or to re-issue such Ordinary Shares held
in Treasury outside of a pre-emptive offer.
It is intended that the Programme will be conducted within the parameters
prescribed by the Market Abuse Regulation 596/2014 (as in force in the UK by
virtue of the European Union (Withdrawal) Act 2018 and as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019) (the "Regulation"), the
Commission Delegated Regulation (EU) 2016/1052 (as in force in the UK by
virtue of the European Union (Withdrawal) Act 2018 and as amended by the FCA's
Technical Standards (Market Abuse Regulation) (EU Exit) Instrument 2019) (the
"Delegated Regulation").
The Programme is expected to continue until the Company's next Annual General
Meeting, which is expected to be held in June 2023.
Any market repurchase of Ordinary Shares will be announced no later than 7:30
a.m. on the business day following the calendar day on which the repurchase
occurred.
Stephen Williams, Co-CEO of Reabold, commented:
"The ongoing technical work related to West Newton has given the JV a high
level of confidence in the planned location for the upcoming B-2 horizontal
well, with drilling targeted in H2 2023. That, combined with the exciting and
highly material potential we have identified at Crawberry Hill, and the
confirmation of the prospectivity of the North Sea assets as confirmed by the
CPR, is reflected in today's announcement that we are beginning the process
of returning excess cash to shareholders by undertaking an initial up to
£750,000 share buyback. We believe that this represents the most effective
way that Reabold can access additional resource on a per share basis for its
investors, whilst we await the drilling of West Newton B-2."
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, as amended.
c/o Camarco
For further information, contact: +44 (0) 20 3757 4980
Reabold Resources plc
Sachin Oza
Stephen Williams
Strand Hanson Limited - Nominated & Financial Adviser +44 (0) 20 7409 3494
James Spinney
James Dance
Rob Patrick
Stifel Nicolaus Europe Limited - Joint Broker +44 (0) 20 7710 7600
Callum Stewart
Simon Mensley
Ashton Clanfield
finnCap Ltd - Joint Broker +44 (0) 20 7220 0500
Christopher Raggett
Barney Hayward
Camarco +44 (0) 20 3757 4980
Billy Clegg
Rebecca Waterworth
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.
Qualified Person's Statement
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 Donal O'Driscoll as a Qualified Person. Mr O'Driscoll has 38
years oil & gas experience, primarily in the UKCS. Mr O'Driscoll holds a
Batchelors degree in Geology from Trinity College, Dublin, an MSc Petroleum
Geology from Imperial College, London and is a Fellow of the Geological
Society and a Member of the GESGB (formerly known as PESGB).
Glossary of Technical Terms
bcf Billion standard cubic feet of gas.
Best Estimate or 2U Denotes the mid estimate qualifying as Prospective Resources. Reflects a
volume estimate that there is a 50% probability that the quantities actually
recovered will equal or exceed the estimate.
Risk factor or P(g) The estimated probability that exploration activities will confirm the
existence of a significant accumulation of potentially recoverable petroleum
High Estimate or 3U Denotes the high estimate qualifying as Prospective Resources. Reflects a
volume estimate that there is a 10% probability that the quantities actually
recovered will equal or exceed the estimate.
Low Estimate or 1U Denotes the low estimate qualifying as Prospective Resources. Reflects a
volume estimate that there is a 90% probability that the quantities actually
recovered will equal or exceed the estimate.
Mean or Pmean Reflects a mid-case volume estimate of resource derived using probabilistic
methodology. This is the mean of the probability distribution for the resource
estimates and may be skewed by resource numbers with relatively low
probabilities.
mmbbl Million barrels of oil.
mmboe Million barrels of oil equivalent. Volume derived by dividing the estimate
of the volume of natural gas in billion cubic feet by 5.8 in order to convert
it to an equivalent in million barrels of oil and, where relevant, adding this
to an estimate of the volume of oil in millions of barrels.
Prospective Resources Quantities of petroleum that are estimated to exist originally in naturally
occurring reservoirs, as of a given date. Crude oil in-place, natural gas
in-place, and natural bitumen in-place are defined in the same manner.
SPE PRMS The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management
System ("PRMS"): a system developed for consistent and reliable definition,
classification, and estimation of hydrocarbon resources prepared by the Oil
and Gas Reserves Committee of SPE and approved by the SPE Board in June 2018
following input from six sponsoring societies: the World Petroleum Council,
the American Association of Petroleum Geologists, the Society of Petroleum
Evaluation Engineers, the Society of Exploration Geophysicists, the European
Association of Geoscientists and Engineers, and the Society of Petrophysicists
and Well Log Analysts. Quantities of petroleum estimated, as of a given date,
to be potentially recoverable from undiscovered accumulations by application
of future development projects. The total quantity of petroleum that is
estimated to exist originally in naturally occurring reservoirs, as of a given
date. Crude oil in-place, natural gas in-place, and natural bitumen in-place
are defined in the same manner.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END UPDUBARRONUSUURRecent news on Reabold Resources
See all newsREG - Reabold Resources - Operational and Corporate Update
AnnouncementRCS - Reabold Resources - Investor Presentation
AnnouncementREG - Reabold Resources - Notification of final tranche of Shell payment
AnnouncementREG - Reabold Resources - Transaction in Own Shares
AnnouncementREG - Reabold Resources - Result of Requisitioned General Meeting
Announcement