ROC Oil aquires Ardmore Field stake
Posted: 31 December 2004
ROC has entered into an agreement with a privately-owned British oil company, Acorn Oil & Gas Limited (AOG), whereby it will be entitled to acquire up to 26 per cent direct equity in the Ardmore Oil Field and surrounding acreage in the UK North Sea (“the Assets”). The interest will be provided by AOG’s wholly-owned subsidiary, Acorn North Sea Limited (ANSL), which presently has a 35 per cent interest in the Assets. Within the area of interest around Ardmore, which is currently producing about 8,000 BOPD, are two small abandoned oil fields with redevelopment potential; a small undeveloped oil discovery and several undrilled prospects and leads with a collective unrisked reserve potential in excess of 60 MMBO.
The consideration provided by ROC is threefold: payment of £750,000 to acquire 75 per cent of the a £15MM senior secured debt facility provided to ANSL; an undertaking to provide senior secured debt to ANSL equivalent to 75 per cent of that company's future Joint Venture cash calls and a payment of an effective option exercise fee up to £1.9MM if/when ROC converts the loan into direct equity in the Assets. If ROC exercises its option to convert its loan to equity according to the presently envisaged schedule, it will book its net share of Ardmore’s remaining recoverable reserves and associated production revenue during 2Q 2005.
In 1975, the Ardmore Oil Field, then known as the Argyll Field, was the first UK North Sea oil field to be brought onto production. After producing 73 MMBO and being abandoned in 1992 the field was redeveloped by ANSL and another privately-owned UK oil company in late-2003. Since then the field has produced about 4 MMBO. Currently, the field is subject to a continuous development drilling and workover programme designed to increase gross Joint Venture production to a high in excess of 12,000 BOPD during 2H2005. As at January 2004, the field's total initial in-place oil was independently calculated to approximate to 300 MMBO of which 77 MMBO (26 per cent) has now been produced.
Remaining recoverable oil at the Ardmore Field has been independently estimated to be in the order of 23 MMBO. In ROC's opinion, exactly how much of this remaining oil will be produced economically will depend upon the results of the current continuous development drilling and workover programme which will unfold during 2005.
For more information see www.rocoil.com.au
Posted by Richard Price,
Editor EnergyME.com
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