- UKCS Block 15/13b Guinea Prospect Farm Out
- Exploration well targeted for Q4 2006
- Granby to retain 24.375%, with its share of the well costs carried
Granby Oil and Gas plc announces that through two Group companies it has executed a Farm-out Agreement with Nexen Petroleum U.K. Limited (a wholly owned subsidiary of Nexen Inc.), and Heads of Agreement with Gas Plus Italiana S.p.A. to farm out UKCS Block 15/13b. As previously announced on 15 May, Albion Petroleum has already signed a Heads of Agreement for a multi-well farm in including this block. The Block contains Granby’s Guinea prospect, a robust 4 way dip closed Palaeocene structure, which lies on trend with fields such as Balmoral and Dumbarton. The block is located some 20km north east of the Piper Field in a water depth of approximately 150m.
Under the farm out arrangements, Nexen, Gas Plus and Albion will together fund the full cost of drilling an exploration well on the Guinea prospect. Nexen will become operator of the licence and earn a 50% interest in the block. Albion and Gas Plus will each earn 6.25% interests. The Granby Group will retain a total 24.375% interest in the block and its share of the well costs will be carried by Nexen, Albion and Gas Plus. Elixir Petroleum (UK) Limited (‘Elixir’) will retain a 13.125% interest.
The exploration well will be operated by Nexen, which has already conducted the site survey and has a rig under contract to drill the well in the last quarter of this calendar year. The exploration well will be drilled to a depth of approximately one thousand six hundred metres (1,600m) true vertical depth subsea to target Granby’s Guinea prospect.
Block 15/13b was awarded as a promote licence to Granby Enterprises and Team Oil (both now wholly owned subsidiaries of Granby Oil & Gas plc) in the 22nd Licence Round in 2004. The Guinea prospect was identified in a study undertaken by Granby of open acreage in the Central North Sea during 2004. A 35% interest was subsequently assigned to Elixir under an alliance agreement which funded Granby’s technical work and licence applications. Elixir is also farming out part of its interest on the same terms as Granby.
Assignment of the licence interests and transfer of operatorship to Nexen are subject to the approval of the Secretary of State for Trade & Industry. Assignment of the licence interests to Albion and Gas Plus are subject to the execution of fully termed farm-in agreements, execution of the Joint Operating Agreement and approval of the Secretary of State for Trade & Industry.
David Grassick, Managing Director of Granby Oil and Gas, said:
“We are delighted to have successfully farmed out this block and retained a material interest in a fully funded well to be drilled during the last quarter of this calendar year. We very much look forward to working with our new partners, Nexen, Gas Plus and Albion, who are joining with us to drill the exciting Guinea prospect.”
Richard Moreton, Executive Director, said:
“This prospect arose from our application of both traditional and high technology state-of-the-art evaluation methods to progressively mature through to drilling a feature we identified on 1987 2D seismic data – some sixteen years after the survey had first been acquired.”
Participating Interests
Following completion of the farm-out arrangements and the assignment of interests in the licence, the participating interests will be:
Company Participating Interest (%)
Granby Group: 24.375
Nexen Petroleum U.K. Limited: 50.000
Elixir Petroleum Ltd: 13.125
Gas Plus Italiana S.p.A.: 6.250
Albion Petroleum Limited: 6.250